Well kat,
I can only speak in terms of my method and what works for me, but I can offer a few suggestions to streamline and focus in on just backing up exactly what it is you need to save, and nothing more.
For instance, to me using a standard disk copying, or windows backing-up program to do your entire hardrive is unecessary. You simply save only the data, txt., media and image files you've created, attached to a given program, and give everything you save it's own folder with a folder name readily identifiable to you. This means forgetting about saving your Windows configuration, and all the application programs and Internet stuff.
Anytime, for whatever reason you need to reformat your hardrive and do a new installation, you should always do a clean install of Windows, and then go in and tweak it (ie: visiting web sites and downloading the latest drivers for all of your peripherals, or backing up these drivers just prior to a reformat/re-install, etc.)
This means getting out Windows Notepad, and systematically going through every critical file or setting you want to retain, and writing in down and saving it as part of the back up. (ie: your internet settings, your email settings, filters, address book, etc.) and, if you have networked computers then you need to record every unit's TCP/IP settings as well as all the bindings, network pathway names, --all the fun stuff you find in Network Neighborhood, etc.
Once I've done all this, and since I have 2 computers in my office, I create a folder on the networked computer and call it "Backups". Nestled within that folder, are many folders containing critical and essential files, with various folder names based on what program they correspond to. For MS Word, I have a "Word" folder, for Eudora I have "Eudora" folder, for pictures I have an "Images" folder, etc.etc.etc.
So as I am continuously working and saving things all the time, I am constantly shooting stuff across the network as well earmarked as back up. Think of backing up, as just part of the "saving" process every time you save a file. You're just saving twice in a row instead of once.
Given the cost of blank CDs now, and with a decent CD Burner, I just take the entire Backups folder with all its subcomponents, and copy it to a blank CD. Takes 5 minutes to put your entire life on 1 CD ---with room to spare.
Anyway, that's the way we dooze it and we likes it! *G*