sue,
My primary computer is a Core2Duo notebook. I run a 160GB external hard drive (connects via USB 2.0) and back up my full system plus all my files. This way, if I have a HD failure, I can restore my full system, including files. If only a file gets corrupted, I can go to that backup and restore the file only.
My backup HD is an IOMEGA unit and I use their backup software. The Casper software Bruce mentioned before is also good.
This method of backup is inexpensive insurance, IMO. Especially if you use your computer for critical tasks such as trading or doing corp. work at home.