Ahh, deciding the "right way" to do backups. A topic with many, many branches and many tradeoffs.
Off the top of my head, some of the most important considerations are
■How much time and money are you willing to put into the process?
■How much of your material are you willing to, or can your business afford to, lose?
■How many days, hours, seconds of work and data can You afford to lose? Note that if you are running a stock trading system, the answer to this may be "None." That's a different kettle of fish.
■How far need you go to protect against unlikely events? The building burning down? A blackout on the East Coast? An earthquake? Civil war?
And some of the issues are
■What should be backed up? Critical files? The entire system? I personally have two different backup regimens, one for my system drive and one for the data drives. The system drive is always backed up as a full image backup, and at any given time I am willing to restore to my latest backup, or even an earlier one.
My data backups are usually incremental, and done more often than my system backups. I wouldn't mind rolling my system back a month, as I keep notes on what changes I have made since them. I would prefer not to lose many days of my work, though. And my mail file is mirrored in realtime to a second drive.
■How often should it be backed up? The key issue here is: how much of my work and data can I afford to lose and have to reconstruct. There are actually products to do "live backups" that will record changes to the target storage in nearly real time.
■How many copies should be retained? This ties in to the previous question, "How often should it be backed up." If you backup every five minutes, and keep the latest copy, what happens if you accidentally store your Word document after erasing a key part (I've done that). You backup system faithfully stores the deletion. For at least working files, you may want to retain several copies, or one copy per day for the last week, or whatever makes you comfortable.
■Where should you back up to? This question comes in parts. The first part is, where should my backups write to initially? I personally do not like using another drive in the same machine. If I get a virus, or it rains on my machine, I lose the backup, too.
On a small scale, it is reasonable to back up to a removable drive, a network drive, or another system on the same network. At the other end of the scale, my employer's datacenter is mirrored in realtime to a site on the other coast of the US, and backups are done to a central silo.
■What should you do with the backups? This is where the question of what kind of disaster you want to plan for comes in. If you keep the backups in the same room as the machine (which I do), you lose everything in case of, say, a fire. If you clone them and give copies to a friend who lives down the block, you will not lose them in that case, but an earthquake would make them pretty unavailable. If you want to be able to keep going after a local disaster, maybe you should Fedex copies of them to a friend in Kansas, or use the services of Iron Mountain. Again, it depends heavily on your needs.
■Backup types and schedules. I am not going to go into backup cycles of how often to do full backups vs. incremental backups. I will just call attention to the topic and you can read up on it.
Read also about media rotation schedules. If you have one backup drive, and do full backups weekly, what would happen if the system failed during a full backup while you were overwriting the previous one? A good backup plan will have more than one complete, separate set of media.
And a caveat to those of you who use RAID: RAID can make your system more reliable. It is not a substitute for backups. If your machine is hit by lightning, if your programming error erases all of your data, if a virus scrambles your files, no level of RAID will do you any good.