I think anyone who cares about their data is always thinking about backups. I know, they are boring, they are time consuming but when it all goes pete tong they are what you need.
I honestly don't think there is ever a perfect backup and even commercial organisations get it wrong and have slip ups.
What do I do, well I have been using Paragon Drive Backup (various versions but actually the free version works really well) to make a complete image of my machine - I now do this for all machines to make sure an overall backup is in place for easier restoration. Will I use it in times of trouble, given Windows benefits from a complete rebuild every now and then I just don't know but I have used it to switch between installs while building my HTPC (ie backup, add a feature, test, rollback if required with no nasty registry hangover).
Unfortunately, making an image takes quite a while and the incremental version doesn't seem very, well, incremental.
So, day to day file backups? I use Robocopy - a free download from Microsoft or built in on Windows 7 - backup what you want where you want when you want, a genuinely useful utility if configured correctly.
But that is still a bit manual - yes I could schedule it but there is no practical way of making it work in the background., but it does the general job.
Recently I received a cover disk with Genie Timeline Free on it - what a great program, it just works and is now installed on two of my machines. It's free so I cannot help but recommend this if you have a spare drive to hand - it's is not perfect but it does work. Problems? Firstly it is a per user install which means each user accounts needs to configure their own backups which is strange & the files duplicate as the backup cannot automatically keep only a single copy where folders overlap. Secondly, although it works neatly in the background, file copying still impacts desktop use (so a fast drive is really needed) and lastly it uses volume shadow copy but each time appears to make a full backup of the file rather than just keeping changes. But it does work.
The downsides were bugging me so I've looked for other software & hit upon Avanquest Autosave Essentials - this is nicer looking, easier to configure and appears to work faster. Also the license price is for 3 machines. Does it work? Well on a test folder of < 30 files it was brilliant. On a backup of my user folder of approx 40Gb? No, junk, it crashed out after a couple of minutes, took less time to remove from the hard disk than it took to tidy up the half copy of files it had made.
So Genie Timeline it is for the time being.