I have taken guidelines from expert exchange solution to create restore partition.
Below is the extract: 
I never figured out the solution i was really looking for but the solution I figured out will do. It’s detailed below. The steps are for an XP system and there are some minor changes in procedures for Vista and Windows 7.
How to Create an Automated Custom Recovery Partition to Reimage Windows XP Systems
Items Needed:
Ghost Solutions Suite 2.5 (recovery kit folder)
NewSID 4.10
BartPE w/Ghost
2 USB Flash Drives (min 2GB)
Windows Automated Installation Kit (AIK)-Done
Windows Vista System
Laptop/Desktop
STEP 1 - Build a System to Image
On the Master production system w/ recovery partition
" Create 2 partitions on the system prior to the installation of Windows.
" Make partition 2 (recovery partition) 10GB and the rest for partition 1 (windows installation)
" Install Windows and all applications on partition 1
" Configure Windows and all applications to your Common Desktop Environment Standard
" Defragment the drives
" Make sure to select to have no drive letter for partition 2
STEP 2 - Create a WinPE BootImage
On a development workstation
" Install Windows AIK
" Launch Windows PE Tools Command Prompt
" Type: copype.cmd x86 c:\winpex86
" Type: imagex /mountrw c:\winpex86\winpe.wim 1 c:\winpex86\mount
" Next, copy ghostoem32.exe from the recovery kit folder to c:\winpex86\mount\windows
" Next, edit startnet.cmd in c:\winpex86\mount\windows\system32 folder to read:
@ECHO off
Wpeinit
ghostoem32.exe -clone,mode=prestore,src=1:2\WINXP.GHO:1,dst=1:1 -quiet -sure -rb
" Type: peimg /prep c:\winpex86\mount\windows
" Type: YES
" Type: imagex /unmount c:\winpex86\mount /commit
" Type: copy c:\winpex86\winpe.wim c:\winpex86\iso\sources\boot.wim
" Type: YES
" Type: oscdimg -n -bc:\winpex86\etfsboot.com c:\winpex86\iso c:\winpex86\winpex86.iso
" Copy the winpex86 folder to the USB flash drive
STEP 3 - Format WinPE Boot USB
On the Vista System
" Copy the winpex86 folder from the USB flash drive to c:\ on the Vista system
" Open a command prompt
" Type: diskpart
" Type: list disk
" Type: select disk 1 (assuming USB is disk 1, or whatever number the USB flash drive is listed as from list disk)
" Type: clean
" Type: create partition primary
" Type: select partition 1
" Type: active
" Type: format fs=fat32
" Type: exit
" Type: xcopy c:\winpex86\iso*.* /s /e /f e:\ (where e:\ is the USB device)
STEP 4 - Create WinPE Boot Partition on the Recovery Partition
On the Master production system w/ recovery partition
" Insert the WinPE Boot USB
" Insert blank 2nd USB flash drive
" Insert BartPE disk (no need to boot to BartPE)
" Select Ghost from BartPE disk
" Select Local>Disk>To Image
" Select the WinPE Boot USB flash drive as the source and blank 2nd USB flash drive as destination
" Name the image Restore.gho
" Create the image
" Once complete, in Ghost, select Local>Partition>From Image
" Select the Restore.gho image as the source and the 10GB 2nd partition on Disk 1 as the destination
" Restore the image
STEP 5 - Create Image of System
On the Master production system w/ recovery partition
" Boot the system to BartPE
" Select Ghost from BartPE disk
" Select Local>Partition>To Image
" Select disk 1, partition 1 as the source and the recovery partition as the destination
" Name the image WINXP.GHO
" Create the image
STEP 6 - Configure MBR to use the Recovery Partition
On the Master production system w/ recovery partition
" Copy SRFixMbr.exe and SRFixMbr.xml from the recovery kit folder to C:
" From a command prompt, go to c:
" Type: SRFIXMBR.EXE
" Type: YES
STEP 7 _ Testing
On the Master production system w/ recovery partition
" Reboot the system, press F3 when prompted
" WinPE should launch, then Ghost should automatically reimage the system and reboot
" Log into the system , the 2 files SRFixMbr.exe and SRFixMbr.xml should no longer exist
 
Everything goes fine but when I use the F3 key to restore , startnet.cmd pauses after the ghostoem32 command line.
 
Ur expert suggestions will b appreciated.