This is the way I work with data:
My laptop has an 80 Gb HD. There I store the documents I work with and the family pictures. That's the info I don't want to lose under any circumstance.
I don't store anything in CD or DVD, I don't trust they will survive or will be readable when the times come.
I have an external HD, 500 Gb, connected to the USB. It is a bit slow but I don't use it much. I have two partitions, 250 Gb each. In one is where I keep a copy of the family pictures, music, and documents in general that I don't need often but want to keep handy. In the other partition I keep big files that I don't mind if I lose -i.e. movies-
I use Microsoft SyncToySet to make a mirror every month or so. In the external drive, in the first partition, I back up the family pictures of the laptop HD, along with "My documents", "Desktop" etc. The same day, I switch on a second external hard drive -250 Gb-, and make a full copy of the partition. Thus, my family pictures are stored in the laptop HD, external HD partition, and another HD that is switched off all the time but when the time for mirroring comes-. Then, it takes two catastrophes -laptop and external HD failures- or a virus to destroy the data in two of my hard drives, but I would still keep the third hard drive, and I would have only lost the pictures taken during the last month.