I would think that it should back-up to a partition as partitions are also called drives. When you and windows refers to the C:\ drive it is referring to a partition, which may or may not be a complete Hard Disk Drive.
See image of the file properties of my d:\ partition, windows reports it is a) Type, Local Disk b) Drive D and c) it has a Disk Cleanup button, at no point did windows call it a partition.
So I'm not sure if this isn't just semantics what a word means, though I could be completely wrong as I don't use the product. My old copy of Drive Image 7.1 allows for the storage on any drive/partition other than the one it is imaging (obviously).
If it doesn't allow saving the image to a partition on the same HDD I would say this is a huge failing since there must be many people out there with very large HDDs that have been partitioned. I can't see Acronis being so stupid as to rule out this potential customer base.
Yes it is better to store your back-up images on a second HDD (as I do) because if your primary HDD fails your back-up images are there and may be lost. That second HDD could I guess be internal (as mine is) or external.