Most days in the past thirty years I have urged someone to back up their work. In spite of that, I've several times lost quite a lot of important files myself. Backing things up is not just a matter of knowing what should be done, it is a discipline that has to be learnt. It may help if, every evening before you switch off, you think: "Where will my business be tomorrow if the hard disk just goes pop?"
First, unless you are an expert, don't even think about backing up the whole drive so that you can restore it after a disaster. For one thing you mostly can't do it from Windows. Want to venture outside Windows? I thought not. You'll do it rarely, too, if it's long and complicated.
Similarly, it's hardly ever worth trying to back up installed programs. Most of them have settings so wrapped into the Windows registry and so dependent on files copied to the Windows system that they will not run from a copied folder. That is often deliberate, to avoid casual piracy. Content yourself with saving files and perhaps settings, like your list of Favourites. In Windows XP these are all grouped conveniently under 'Documents and Settings', if you were sensible enough to accept the defaults (a 'default' is a setting that applies unless you deliberately change it).
Although 'My Documents' on the desktop is only a shortcut to the real thing, any other folder you keep on your desktop may only exist there, not in 'My Documents'. That's another reason for always saving 'Documents and Settings', which includes the files and Desktop for all users, rather than 'My Documents'. In Windows, when you copy a folder, all the sub-folders are copied too.
My own preference is to copy files and folders exactly 'as is', so that any individual file can be recovered if needed. Large media are now cheap. Any minor gain from compressing the files to save space will rapidly be lost when the program for de-compressing them turns out to have been lost in the disaster. Also, many compression systems suffer from being unable to recover anything if a tiny part is damaged. Confucius says: "Better to lose one file in a thousand than to lose a thousand files in one".
A surprising number of people don't know how to copy even one file. Windows makes it easy but confusing. 'Drag and Drop' means that if you press and hold down the normal mouse button while the cursor is on the file you want to copy, you can drag it to a folder on the same drive or another drive. When you let go of the button, the file will then be found in that folder. As so often with Windows, the next word is "Unfortunately..."
Unfortunately, this action has three modes of working. Sometimes it 'moves' the file (i.e. the file is no longer where it originally was); sometimes it will make an extra copy as you expected; and worst of all, thanks to the genius of Microsoft's programmers, sometimes it will place a 'shortcut' to the file, even on a floppy disk, where you thought you had placed a copy. Imagine getting to your office 50 miles from home and finding that the 'file' you so carefully copied is only a shortcut trying to load the file from your hard disk at home. The secret to ensuring that you always get a copy is to check that there is a little plus sign next to the file icon as you drag it to its new home. If not, hold down the control key while you drag. You should see the little plus sign appear.
Looking after files is made much easier if you abandon Windows' childish icons and select 'details' as your default setting for all directories ('folders'). Now you can see the size and date of files, as well as being able to select groups of files easily for backup. To select a group of files that follow each other, click once on the first one and then hold the Shift key down while you click once on the last one. All the files in between will be highlighted, and can be dragged as a group. If the files are not together, add each one after the first by holding down the control key while you click. You can also use the control key to 'unclick' one or two files in a continuous group if you don't want them included.
When you select groups of files, take care not to click on 'Open' or 'Delete' from the right-hand mouse button menu. 'Delete' will give you a second chance, but 'Open' will just open each file in turn until the machine's resources are exhausted, and there seems to be no way of stopping it.
Even before you copy the files to safety, are you using the all safeguards available in your software? Most versions of Microsoft Word, for example, allow you to set an 'autosave' every few minutes while you work. It rescues most of your work if the power goes off unexpectedly. Better than bashing away for two hours then losing it. You can also choose always to keep the previous file version as a backup whenever you save manually. Unfortunately this sensible choice is not a default setting; but you can select it for all Word files under 'Options' in the 'Tools' menu. In XP versions of Word it is on the 'Security' tab. For Microsoft Excel, keeping the previous file version has to be separately selected for each file you start. Select 'Save As', and then 'General Options' in the window that opens, and tick the box. It is worth making that a habit, because although I regard Excel as the finest program ever written for the PC, it has been known to lose a file with no user error at all. It is rare, but I've actually observed it once, and have had two business customers with the same unfortunate experience.
Next, let's start with individual files. If there's just one, like an important homework project or thesis, you may get it on to a floppy disk. Better than nothing; though floppy disks are one of the least reliable storage media. If it is an ongoing project, at least use a different floppy for alternate saves. Remember, most computer storage media are magnetic. As they get older, they gradually lose their magnetism, and become less and less reliable to read. Don't 'economise' by using the same floppy disk for years. Don't keep cute little magnet paper-clip stores next to your floppies on the desk. And don't fall into the trap of believing that because you are always being urged to save files to a floppy, you should always work directly to floppy disk for safety. The built-in hard disk drive is much faster, much safer, and ensures that your floppy backup is a backup, not the sole copy.
Nowadays you can save bigger files conveniently to USB (Universal Serial Bus) devices, from key-fobs to gigantic external drives. These work best with Windows XP, where you just plug in and go; but most can be obtained with drivers for earlier versions of Windows. Sadly, USB devices are difficult or impossible to get working if Windows will not start, so they are not much use for rescuing your files after Windows has failed and needs to be re-installed.
For large amounts of data, like customer databases or collections of scanned photographs, a USB hard disk drive can be a good solution. You can buy an excellent 250GB external hard disk drive for about £130. A drive of that size can be used for regular backups of several machines, and on Windows XP it needs no installation at all. It is quick, reliable, immediately checkable, and can be kept well away from the computer if you're concerned about fire or burglary. You may feel that if you have a fire or a burglary, you'll have more to worry about than whether your files are safe. True, but it is said that most businesses which lose their records never recover. One point to keep in mind if you are to be really safe: modern hard disk drives seem to have a typical working life of only about four years, thanks to the ever-increasing speed and precision required for large capacities. You may need a third hard disk to back up the second, if you keep material on it that has been discarded from the main disk.
The ideal backup is off the premises, not just in the same machine or sitting next to it. One of the best simple backup regimes I have met was the company that backed up two copies of their main file to floppy disks each night, and sent one home in the secretary's handbag. The equivalent, now that everything has grown so much bigger, is to save to a CD-writer. At 52x speed they take little longer to record 500MB than a floppy does to record a handful of small files. I find CD-Recordable (i.e. write-once) is better than CD-Rewritable (write repeatedly). They are cheap, read on all drives, and you will have an earlier copy if one gets scratched or lost.
It is possible for those on broadband to back up to secure storage on the internet. Except for tiny quantities that can use free web space providesd by your ISP (Internet Service Provider), it does involve regular fees. Even on broadband it may not be suitable for very large archives unless software to ensure incremental backup only is used. Most services charge by the amount of data per month that is transferred, and the storage is more secure than on free web-space, so backing up huge amounts every night can be expensive. These facilities generally come as a package including software, and we would be happy to advise or install, as with the other methods above.