You have to have root access and flash the hero recovery image before you can run a nandroid backup. If you have rooted and flashed the recovery image, it is very simple.
I have not rooted my hero yet but did play with a rooted G1 and the steps are similar.
1) boot into recovery mode (on the hero I think it is home + Power)
2) you will see an option for nandroid backup. Choose this option and the rest is automatic. It saves a copy of the backup in a nandroid folder on your sd card.
to be on the safe side, take the backup off if the sd card because I have seen where if you do a second backup, the first one gets deleted.
Let me know if this helps
