You’re totally wrong. ‘Virtual drive’ in CDS is just a container where you can put files which you don’t want to be deleted after reboot. It can be placed on shielded drive, and so to say this file (*.img) will be excluded from shielding and all changes made to it will be permanently written to hard drive. Although it is a (container) file the system will see it as a normal partition therefore the name Virtual Drive. You can think of Virtual Drive as of an CD/DVD disc image like *.ISO or *.NGR with this difference that you can actually not only read data from it but also you can write data to it. But is it inefficient and useless unless you’ve got just one hard drive with just one partition which is very rare in these days.
As for backing up, you can easily copy the container file to other non shileded partition, but since you cannot mount or dismount container files as Virtual Drives in CDS (you can just create or remove Virtual Drives), there is not much sense of doing that. Besides it is much easier to backup data without messing with the container files.
As long as the Virtual Drive is present in CDS you have access to your files like to a normal partition. Right now CDS doesn’t allow to mount or dismount *.img files so if you remove your Virtual Drive from CDS then all data from *.img file will be unreadable. Even if you remake exactly the same Virtual Drive and replace the img file in safe mode then CDS will still claim that this disk is not formatted. I don’t know what kind of file format CDS uses exactly. If it’s not a custom file format of what I doubt then there is a slight possibility that there is some tool publicly available which can extract original files from the container file.
I suggest you to create a virtual machine and test the software by yourself. It will help you understand how the software actually works without a risk of losing data. Virtual PC 2007 is free and good for beginners. Also it doesn’t have compatibility issues which are present in other virtualization software like VirtualBox.