Hi, I hope to buy a PC with Windows 7 installed but without a back up CD. How can I back up the operating system on a CD that I can use in case I need to format the hard drive and reinstall Windows?

You cant. But you can create recovery cds. If you buy a branded PC (sony, lenovo, dell, hp, etc) they all have software which allows you to create recovery cds back to factory state. If you have a whitebox PC you can use symantec ghost or Acronis true image.

You can backup your computer/windows using Acronis True Image Home. Here is a video how to create a backup, though the video for Windows XP but you can get the idea how to backup windows OS.

Tanzee is correct, you need to image the drive. Here's a link to free imaging programs which have been tested and reviewed:
Best Free Drive Imaging Program

I used to create a small partition on computers which I would store a compressed disk image, and a small version of linux used to restore it. If you are going to Image it, just make sure you know how, and have the tools to restore it, or they will be worthless to you.

EASEUS Todo Backup Is like it says. Ease! Download it and create an image on DVD. If the partition is large you can span over multiple DVD's.