Hey! You can avoid backing-up data by having a multi partitioned drive. One partition on a drive for the O/S and some programs and another partition for movies and such. This way if you need to reformat and reinstall the O/S you don't need to wory about the majority of your data and programs. You just need to reinstall the programs on the primary bootable partition. The next time you reformat the whole drive, make more than one partition with Fdisk.You need about 5gb for the O/S and some utility programs like antivirus and spyware and other such utilities that keep your system clean. The rest of the drive can be used as you like for storage,back-up and such.
still copy info onto cd/dvd just in case drive should die, you still have info to put onto new drive, a couple of my customers found out the hard way when drive died so did their info
HDDs are much more reliable than optical media (provided you're not meddling with them between formatting ,,, which you shouldnt be)