McGrady is expected to miss three weeks. He walked slowly and winced as he bent at the waist between perimeter set shots at the Toyota Center on Monday.
"That's definitely an improvement," McGrady said. "I've been walking around here hunched over for the last three days. This is the first day I've been able to stand straight up and not have any problems."
McGrady suffered the injury doing a reverse layup at Friday's practice. He bumped into Yao Ming, landed awkwardly and immediately felt sharp pain.
"It broke me down, and I couldn't stand up," McGrady said. "It was pretty painful. Gosh, I don't want to go through that anymore."
McGrady said the injury was a recurrence of back problems he had when he played for Orlando. He was optimistic this time that he would beat the doctors' prognosis.
"I know how to deal with it and I don't think it will linger around for those three weeks because of the improvement I've seen over the last couple of days," said McGrady, the NBA's sixth-leading scorer last season.
The Rockets play Orlando on Tuesday night in Houston and then open a five-game, eight-day road swing in Miami on Thursday. McGrady will travel, too, hoping that he'll be back in uniform by the end of the trip.
"I don't think I'll be able to go. But like I say, I don't know," he said. "I didn't think I was going to be able to come in here and shoot or be able to walk straight. I'm not ruling it out, though."
McGrady scored 23 points in the Rockets' opening 98-89 win over Sacramento last Wednesday. Without McGrady against the Hornets on Saturday, Houston was outscored 17-2 in the closing minutes and lost 91-84.
"Mentally, you tend to try to look to him to bail us out," said guard Derek Anderson. "We can't do that. Unfortunately, it took that to happen for us to see that."
The back strain is the latest complication in an aggravating three weeks for McGrady. He sat out Houston's last two preseason games with tendinitis in both knees and then bruised his left knee in another collision with Yao in the practice before the opener.
"It was my best offseason in terms of my work ethic and getting in the best shape of my career," he said. "It's just very frustrating because you put so much time into it. When the season comes, you're all pumped up and ready to play, you want to get out there and compete with those guys."
But McGrady said he's being careful not to come back too soon and said it will be good for the Rockets to learn to play without him.
"It gives those guys a chance to gain confidence and grow while I'm out," he said. "I'm not going to leave them out there for long. And when I get back, we're going to be a hell of a team."