I agree with what a lot of folks suggest here.
The Time Machine feature built into Mac OS X is dead simple to use. Connect an external hard drive to your Mac, tell Time Machine to use it for backups and you’re good to go. The fact that the Time Machine utility is available from within many applications is the killer feature.
Did you accidentally delete an email? Just hit the Time Machine icon and watch the magic. You can scroll back in time, find the lost email and restore it from within your Mail app. That’s powerful and much, much better than attempting to restore a historic copy of the entire Mail database from some ad-hoc backup you made.
The Time Capsule router + hard drive is also great. It offers a server-grade hard drive for extra reliability and it’s really nice to have if you’ve got a portable machine – like a MacBook or MacBook Pro – where you don’t want to plug in a plethora of cables every time you bring it home. The ability to perform wireless backups without any effort and almost no configuration is worth the relatively high price for many folks.
However, Time Capsule doesn’t really work like third-party routers that you might be familiar with. Apple does their usual trick making it “just work” in a way that can be somewhat frustrating for power users. You must install Apple’s Airport Utility software to connect/maintain the Time Capsule, for example (they do offer Mac and Windows versions of it).
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All that said, Time Machine (working with Time Capsule or other disk) just provides a single layer of backup redundancy. Your disaster recovery planning should also include disk cloning on a regular basis as well. For the Mac, you can use SuperDuper!, CarbonCopyCloner, or even the Mac’s builtin UNIX features to accomplish this task. Make sure that you clone once per week or so and store your cloned disk image off site just in case of catastrophe.