How to backup?

What's the best way to backup a computer?

For a while, I've been doing it by making hard copies of all my "important" non-replacable files (images, docs, music files, ect) onto both a small external HD and a couple of DVD-RWs.

But I'm reading this article that says the only sure way to do a backup is a full disk image (by using Ghost or a similar program). I don't own Ghost, and even if I did, I have enough room on the main hard drive but not enough on the external for the disk image. I also don't see the point as all I want to do is save non-replacables and system settings.

Is there a way to get XP to back up specific folders on a schedule, to look in the folders (like My Documents) and look for anything that's changed and copy it? Also, is there a way to save XP's settings as I've never figured out that.

You're much better off doing whatever it is you're doing, though I suggest keeping your DVD-RWs very safe, and make sure they're good for a long time.  Making a disk image will preserve -everything- on the disk, but really isn't necessary unless you're paranoid and you want everything exactly like it was.

Yeah, do that. Manually select folders you have your stuff in (don't bother for separate files under 50 MB as your time is worth more than your DVD-Rs), and here are a few very important tips regarding media:

1. Don't use rewritable media for this. They're less reliable (you want maximum reliability if you're backing data up), it's a waste of money (you aren't really rewriting it often), and somebody may accidentally rewrite your backup, or intentionally alter it.
2. Use nothing but Taiyo Yuden media. Cheap shitty media will last for 0.5…2 years. Average media will last for 2-5 years. Taiyo Yuden media will last for 100 years, though they couldn't really test that without accelerated exposure to UV ^_^.
3. Keep them in a dry, dark place, using jewel cases or, if you're running out of space, slim cases or spindles, but nothing else.
4. +R is more reliable than -R (better error detection/correction).

Where does one get this Taiyo Yuden?

http://www.taobackup.com/

The software that comes with >= Windows2000 is not sophisticated enough to make backups feasable without a SCSI or ATA tapedrive.  If you're serious about backups, a tape drive is probably a better investment than fancy software.

What about anther hard drive?