What are the best storage ideas for home desktop backup storage?

I just want to use it to back up my personal data files, movies, photos and music. Total storage for all of this (although it’s growing all the time) is about 800MB right now. I’ve considered just using CD’s, but my software (Roxio) keeps becoming incompatible with Windows upgrades and it’s getting frustrating….not to mention time-consuming. I’ve also considered using USB flash drive(s) or buying an external hard drive. Have you had any personal experience with this? Do you have any suggestions about this? Thanks!

This might be helpful:
Dell Dimension 4400
Processor Intel(R) Pentium(R) 4 CPU 1.60GHz
Processor Speed 1.56 GHz
Memory (RAM) 768 MB
Operating System Microsoft Windows XP Home Edition Service Pack 2
Currently 22.1GB used on a 40GB hard drive.

Dell Inspiron 1525..?

This is the laptop I am purchasing, is there anything i should consider changing/upgrading?

PROCESSORIntel® Core™ 2 Duo T5850 (2.16GHz/667Mhz FSB/2MB cache)edit
OPERATING SYSTEMGenuine Windows Vista® Home Basic Edition SP1 - Englishedit
SYSTEM COLOUREspresso Brownedit
LCD AND CAMERAGlossy, widescreen 15.4 inch display (1280×800)edit
INTEGRATED WEBCAMIntegrated 2.0M Pixel Webcamedit
MEMORY2GB Shared Dual Channel DDR2 at 667MHzedit
HARD DRIVE250GB SATA Hard Drive (5400RPM)edit
OPTICAL DRIVE8X CD/DVD Burner (DVD+/-RW) with double-layer DVD+R write capabilityedit
WIRELESS CARDIntel Next -Gen Wireless -N Mini -cardedit
BATTERY OPTIONS6 Cell Batteryedit
SOUND OPTIONSHigh Definition Audio 2.0edit
Essentials
PRODUCTIVITY SOFTWAREMicrosoft Works 9. DOES NOT INCLUDE MS WORDedit
HARDWARE SERVICES1 Year Return to Depot Service and Technical Supportedit
SECURITY SOFTWARENo Security Software Pre-Installededit

ONLINE DATA STORAGEDell Online Backup 2GB for 1 yearedit
Accessories
CARRY IT!Belkin Notebook Sleeve - Fits Notebooks of Screen Sizes Up to 15.4-inch - Chocolate/Blueedit
SAVE IT!Patriot Signature Mini 4GB USB Flash Driveedit
ALSO INCLUDED WITH YOUR SYSTEM
GRAPHICS CARDIntel® Graphics Media Accelerator X3100
EXTERNAL MODEMIntegrated Modem
LabelWindows Vista™ Basic
NetworkIntegrated 10/100 Network Card
Adobe SoftwareAdobe® Acrobat® Reader 8.1
Processor BrandingIntel Pentium® Dual-Core Processor

Total : 3.32
Additional Question: Will this laptop be capable of downgrading to windows xp, home edition?

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