How do I convert a NANDroid backup into an update.zip file that works in the stock recovery mode?
Most stock recovery modes require proper, officially signed update.zip files. There are ways to convert NANdroid backups to update.zip files or even directly back them up as such but the hard part is actually signing the update file (there are a handful of tutorials for doing these on the Internet, and in part in the official Android documentation). The signing requires official keys which can only be generated by the manufacturers. Getting them is nigh impossible unless you have inside access or very very cooperative support.