Computer help: Need advice on backup/restore disc for PC with Vista.

Need advice on backup/restore disc for PC with Vista.

I've never backed up my computer before and now I want to become a little more responsible. I've had my machine for about a year. It's an Acer M1100 desktop with a 2.3Ghz 64bit AMD proc, 320GB hard drive, 2GB of RAM. The computer did not come with a restore CD (***!) So I've always been vervous about this. I never saw how to create your own in vista. I know you can make a backup, but what if the machine is not bootable? You can't boot from a backup right?

Also, I just bought a pack of DVD's to backup data and a 1TB external storage drive with an esata connection, but I haven't connected it yet. I'm not sure of the best practice to:
1) backup my info and
2) create a boot disc
3) how to manage future updates
Not sure to do image, raw backup, or what. I just don't have much knowledge on this subject.