backing up data
-pictures (clips from online DLs, screenshots, photos, and scanned items)
-PC game save files
-personal and other documents
-files for my PDA
I had my HD die on my before. Didn't keep recent backups for the bulk of my stuff, but that was fine since I actually did backup the more important files. Everything else was nice to have, but i could easily do without. Having an ext hardrive is convenient b/c u just drag and drop. w/DVD and CD burners using R discs forces you to get as much of the max capacity full as possible. RWs may not be compatible across other PCs and burner softwares. With ext hd, just plug into any USB PC and you're good to go.
That said, I do commit stuff that's suited for archival like picture to optical disc. I will also be getting a bigger ext hd. I've got an 80GB hd for my 160GB IDE. Got the former on sale, but now that several years have passed, I can count on higher capacities 200GB+ to be cheaper than ever