You're welcome. :-)
I'm sorry that you couldn't get that to work. 7-Zip is definitely a nice compression algorithm, and there are some nice command-line tools that you could easily integrate into a script like this. In fact, my first attempt at this script used the PowerArchiver command line tools. But, the thing I don't like about using archives (whether it's bzip, tar, zip, cat, etc.) is that when it's time to restore files, you have to use a utility to extract files from the archives. In my experience, simply using the Windows native file system compression utility gives me compressed backup data, and it's completely seamless to the user. When I prepared my external backup disk, I selected "Compress this drive to save space" before I copied any data to it, so the whole volume is compressed. Granted, the compression isn't as good as 7-Zip, but it's pretty good as they go. Plus, when I want to restore a file I just use the Windows 7 search utility to find all instances of the file or folder that I want to restore, and it displays them in the Explorer window for me to copy from. I get seamless, direct access to any file and/or folder right in the Explorer window without having to use any other tool to sift through a multi-gigabyte archive file.
I recognize that some backup strategies warrant the use of compressed archives, though. If that's the case for you, I wish you luck.