Tried using File---> Library----> Backup to disk option but it doesn't work...Maybe because i got 5.76 GB apps/games in total.
Not sure there is any answer other then "why?" If you delete or lose anything that you paid for you can just download the files again. Also, all you said is "it doesn't work" - what happens? Click the radio button for "backup only iTunes purchases" and see if that helps.
I the disk is 100mb and the total is over 5bg...You will need to seperate things out so its uiner 700mb (standard disk size I think)