I do have the Version 3.4 now and when backing up my root (top-level) with the option "backup only top-level site" all subsites are included :-( I was missing this option in version 2.3 :)
Normaly I would expect to have three backup options
a) top-level only
b) top-level plus all subsites
c) subsites only
and of course the ability to check or unckeck the stsadm parameters like includesecurity, nocompression and so on...