I am trying to create a software like Ibackup.com. However, I am not sure how to make the software so that it'll map as a local Harddrive. And i am not sure where to start researching on this. Someone please give me some pointers.
I can point you to Dokan ( a user filesystem for windows like FUSE on linux), You install the driver then write the appropriate software for replying on IO request.
On a more complex answer you have to work with the NT DDK to write a driver that would be your software for being a filesystem (look at IFS: installable file system ), note that it is very complicated to work with (mainly because a crash of your software mean a BSOD ), and you would probably like some more higher level software like Dokan that would help you in that regard.