The best possible backup is to have a second hard drive the same size as your main drive (or larger) and software to clone your hard drive. Cloning makes an exact, running duplicate of your hard drive. If your main drive fails, the cloned image can directly replace the old drive, or it can be used to reload everything, including your operating files, on a new drive without re-installing the system or your programs. If your hard drive fails or becomes irreparably infected, it WILL save your butt.
Acronis True Image is a commercial program that does this. It sells for around $50, and I've seen it for much less on sale with a rebate.
Seagate and Western Digital offer a version for their drives. In both cases, at least one of the drives in the chain must be from the company offering the program. Seagate owns Maxtor so their version works for both brands.
Acronis True Image for Seagate and Maxtor drives.
Acronis True Image for Western Digital drives.
EaseUS Todo Backup is another cloning program that is absolutely free.
I've used both to clone Windows 7 and XP drives. Of the two, I prefer Acronis only because, when cloning between a smaller and a larger drive, by default it fills the larger drive, rather than creating a smaller partition on the target drive, but it is adjustable once you understand the controls.
I clone my drive once after every full virus/spyware scan and before installing any new program. If the new installation screws things up, you can restore back to where you were and try again.
The programs also allow you to create a recovery disk so you can boot to it and clone from your backup drive to the main drive. This is useful for laptops where you can clone to an external drive and restore back to your main drive or a replacement drive.