With as much data as is stored on a modern computer system, how do you decide what to backup? Should you just put the entire system on a CD or tape and be done with it? There are several problems with putting your entire system in a backup, not the least of which is cost of tapes and CDs. Also, the time to perform a backup is increased when the entire system is stored.
As long as you have the original CDs for your software, there is no need to include the programs themselves in backups. For example, your operating system and word processor shouldn't be backed up. The data files, however, cannot be recreated so you should include them in backups.
You DO want to backup:
all your web pages, databases, and anything that you made or would have trouble replacing
all the information from your financial software
all the information from inventory control, customer databases, or other specialist business software
internal documents (important memos and the like)
anything you would suffer for lack of if it lost
You MIGHT want to backup:
your email, especially if it has customer queries, contact data, or other business-critical information
preferences or bookmarks from web browsers
your personal settings for how your computer works
anything that would be a nuisance if it was lost
You probably DON'T need to backup:
your operating system, so long as you have the original disks
your software, so long as you have the original disks
strictly temporary files (like a webcache, or anything in the trash can)
anything that you are CERTAIN you won't need if the entire computer becomes rubbish.
How many days worth of information could you afford to lose if your computer crashed? What about if your office or home burned down? What about if most of your city was wiped out by a tornado or a flood?
The answers to these questions will tell you how often you should do a backup, and roughly where you should store them.
The computer crash one is for your most frequent backup - usually a daily backup, stored in your office or home.
The office-burned-down is for your next most frequent backup, usually a weekly backup stored in a secure place in another building - possibly a friend's place, or a friendly business whose backups you store. (Exchange backups each week.)
The final is often a monthly or six-monthly backup, and is stored somewhere distant - and in some cases, isn't done at all. It's a matter of choice, and what risks you want to take.
Any backup plan is simply a way of controlling risk. You risk losing a day's, a week's, a month's or a year's data - instead of risking losing it all. When devising your backup plan, think about how much risk you are willing to take.