If you ever get past that problem, I have another warning for you.
Steam DVD Backup is broken.
Why? Well, if you try to back up more than 4.3GB, Steam will error itself and die. Valve thinks that using their uber compression they can cram their entire game library onto one DVD. Of course the CD Backups are fine. 8CDs sounds like a reasonable amount of discs. But ONE DVD, like unless you go out and buy a dual layer DVD+R, 8GB will never fit on one disc.
With that said, use WinRAR.
I'm in the middle of preparing an installation program so I can reinstall everything with just one click.