Why not mix and match?
Keep all your documents in one folder, with sub-folders so you can keep it all organised. Once you are happy with your system configuration, backup everything
except your documents folder onto cd-r. As you install more programs, make another backup. That way, if your most recent backup goes awry, you will only have to re-install 1 or 2 programs.
Use a cd-rw for your data. Files that have been updated will get overwritten and it will be much less confusing when you restore.
Most people don't bother with backups, and get their fingers burnt when it all goes Pete Tong. Mean to go on as you are starting (Yes, I did mean it that way round
).
Another way to go, for a PC anyway, is to get a second hard drive. Yes, its more expensive, but transfer is molto fast. Install a bare bones Win98 on your second drive(ie, don't put any support for sound cards, etc on it). Now make a directory called "System Backup" and make another one for data. If you need more info on this option, post back here. I'll check back in a couple of days.