Yes. Install qemu-utils, it's small, and read the qemu-img man page.
I'd write a image from device to compressed qcow2, then back out to the next device.
Works well.

Yes possible. I suggest getting a "rescue media" bootable cd from early version of Acronis to do it just so the dual boot and XP are good when you write image to a new diff HD.
You need to consider what HD you may write that image too also, bios limits, OS hd limits etc...

Yes, that works well. Make sure you image the entire device and not only the partition, then the bootloader will remain intact.

If you want to save space, first mount it and write a zero filled file to the file system until it is full, then delete the zero filled file.

dd if=/dev/zero of=/mnt/wherever/z.img
rm /mnt/wherever/z.img
umount /mnt/wherever

Then you can pipe dd through gzip -c:

dd if=/dev/sd<x> | gzip -c | dd of=image.gz

Redirecting with > to image.gz should work too.

Then the file is small.

You can perform the reverse to cast it into another device that is the same size or bigger.

dd if=image.gz | gzip -d | dd of=/dev/sdx

You might want to specify a read/write size with bs=64k as a dd parameter to speed things up a bit.

use a block size parameter of 1mb or more with dd, otherwise it takes forever with the default size (512b).