I am a firm believer in using an external drive for backups. I like to create an image so that if I have a catastrophic failure, I can simply restore the image to a new drive and I'm ready to go.

backing up your files and data at the very least is very smart, should you have a hard drive failure or your data get corrupted you would lose it if it is not backed up, burning to cd is one way to do that, but getting a stand alone usb hard drive is another way. They usually have a large capacity so can hold a lot of stuff. I have a 500Gig seagate freeagent pro . you basically just plug it into your usb port on the pc and your pc will recognize it as another drive, you can then just move files back and forth to it from your pc. That makes is very easy to put all your pictures and stuff that takes up a lot of room on it rather than on your pc hard drive, keeping your pc less cluttered and easier to maintain.
You currently have 22.2GB free left of the 39GB that is your hard drive. One reason you do not want your pc hard drive to get terribly full is that it can not run some of the stuff you want to be able to run for maintenance if it is too full for example a defrag, and setting system restore points.

As to do you need one that would be up to you. I would say if you do not use some method of back up currently for your files and data then you should be.
I use various methods, I have the usb hard drive, I also use thumb flash drives, cd and dvd and I have an online storage locker I can store stuff online. So hopefully if something drastic happens I can salvage the stuff that was really important.
You can also get image programs that will take a snap shot of your entire hard drive including the operating system, you can store that image file on the external hard drive or flash drive, and from that you can quickly recreate your entire hard drive, I have Acronis True Image.

Thanks everyone.
OK, I am in Canada, and my local Future Shop has these two advertised:
Seagate FreeAgent Desk 1TB External Hard Drive (ST310005FDB2E1-RK) 129.99
or
Seagate FreeAgent Go 500GB 2.5" External Hard Drive (ST905003FAB2E1-RK) - Black 129.99
Being a computer nitwit, I do not know the difference. Can you tell me which to buy, if any.

i know dell has an online backup data program that is quite reasonable..does anyone have any suggestions on whether this would be a good hting to use or not?

The 1 TB drive holds twice as much as the 500 GB drive. I'm amazed they're the same price. I would get the 1 TB drive.

the main difference is that the Go is very small and can be carried around in your bag easily it is made to be portable, the Desk is to be set on the desk and remain there pretty much like most external drives. the Desk is closer to the one I have.
The 1TB is one terrabyte which is well huge you should never need more space.
If they have smaller size like 250-500GB they would be cheaper and still quite sufficient in size.

I have never used Dell online storage, I use ADrive on line storage, they provide a very large storage locker for free and you can purchase more if you need it.
http://www.adrive.com/
50Gb free storage, it is the most free storage on the web that I know of.
Carbonite is also a good option for a pay storage which also does backup automatically.
Kim Komando has an ad for it on her site and you can get a free trial by going through her site
Carbonite

Here is a link that might be useful: seagate drives

I didn't notice that one was a Go. If you have a laptop, a portable external drive can be very handy. If you've got a desktop, the larger drive is definitely better.

"The 1TB is one terrabyte which is well huge you should never need more space. "

I remember being told something similar when I bought a 10 meg drive. And later, when I bought a 40 meg drive (and needed special software to use anything beyond 32 meg) and . . .

For me a person with only one computer and who seems smart enough to back up data on a regular basis would be wasting good money on an external drive.

Seriously, you back up regularly which is excellent so nothing can get lost apart from a few files since the last back up if the drive fails. If things go wrong simply reformat and load you programs back on a nice clean hard drive and have the $100 in your pocket for a better gadget later, like a bigger flat screen monitor if you still have a CRT.

Right now you have a half filled 40gig hard drive, what on earth will you load on a terabyte drive? You will need to send a search party to find your data in that huge expanse of available drive LOL.

Thanks Owbist,
Now this is probably a really stupid question. But in my accessories under system tools is something called backup. I have never used this. When I go on , it gives me a choice to back up to A:floppy disk or F: removable File.
I do not have any floppy disks, so I have a cd burner and that is it plus a small 1 GB Flash gizmo.
Can I put a CD in the CD slot when it says A: Floppy disk.
Then do I just say back up everything and about how many CD's will this take.

Personally I would not, if you try to back up your entire drive that way it will take a lot of cd's and many times they do not burn properly. I never had much luck with it anyway.
Well the thing is if you are going to do back ups as we all should you need someplace to store them and to me an external drive is by far the solution I prefer, now do you need to get one that large, no, I just saw a 250 Gig seagate for under $40. I have had better luck saving to external drive than to dvd and cd.
But everyone has their preferences and it is often by trial and error.

Also Lyban some of the external hard drives come with free software that will do the backups for you on a schedule and back up exactly what you tell them to. I know my seagate pro does and I think seagate did have a version of Acronis with some of their drives not sure they still do that.

Ravencajun is correct, all Seagate and Maxtor hard drives come with backup software on them. This started quietly about 2 years ago, I never really understood why it was never a big advertising feature. For those who already own an older Seagate or Maxtor drives you can visit the respective web sites and download the program for free, the Maxtor version is 103 megs and the Seagate 104 megs.

My thoughts on backing up was not to do the whole computer, just the personally created data. I did that for years and when I felt my machine was too cluttered I wiped my drive and started over. Now I use Acronis True Image but I have only ever done one restore from it.