is this possible from Win7? How?

Download a burning software like Burn4Free (free software sticky), when in the program click like "Make Data disk" then just browse all the files you want.

Usually for backing up you do Documents, Music, Videos, stuff like that.

At the first startup i was prompted to make restore-discs. (I made 4 discs, and that was a clean install, computer was new)
A program from HP copied all of the system, so i have a red button to clock my computer back in time..
But i have never tried to browse the disks, it could be risky you know.. (Self-extracting discs! )

But since its directly from Microsoft you could maybe find something free instead.

You need more then 1 DVD to back up too..

What files are you planning on backing up anyway?
All of the system or just your own files?

Wouldn't it be easier to back up to an external harddrive?

As EJ said it would be easier to back up to an external hard drive. However, if you're fixed on the idea of DVD backups, then just go into Windows 7's Backup and Restore Centre (accessible via Control Panel), start a backup and as it walks you through the process, select 'DVD Drive' on the 'Select where you want to save your backup' screen. Depending on what you want to back up, you may need quite a few blank DVDs.