For details on how to use Windows Server Backup for application level recovery please look at the article http://technet.microsoft.com/en-us/library/cc725726.aspx
Note:
1. The application needs to be registered with Windows Server Backup for showing it as a recoverable item in the recovery wizard. Please see details on how to register any application @http://msdn.microsoft.com/en-us/library/cc307260(VS.85).aspx If you’ve Backup plugin installed this may already be done for you.
2. You should select full application volumes for backup.
Please share the outcome after trying out above steps.
Please confirm if you tried recovering application using the steps given @http://technet.microsoft.com/en-us/library/cc725726.aspx. Are you able to see SQL as recoverable application?
Let me explain Backup application behaviour:
1. Backup application uses VSS snapshot to get the consistent copy of the source volumes selected in the backup. In most backup applications, this will involve all the writers for that volume.
2. Most applications (like SQL) logs that there writer has been involved and the backup snap was created.
3. It’s upto the backup application to copy the files reported by the application writer.
So you may see application log that backup snap has been created for that application, but the backup may not have copied those files at all.
Please try to backup the full volumes where your SQL application resides and the retry application recovery flow and update your results.