Although I've never lost "irreplaceable" files, a couple years ago I lost all the backup MP3's I made of all of my CDs. Reconverting all my CDs into MP3's was an incredibly tedious task. In addition to the ripping process, I had to re-tag all the new MP3 files. Once I finished that, I vowed to myself "Never again."
I have two internal hard drives. The primary drive is split into a C: drive and a D: drive. The C: drive is for programs and system files. The D: drive contains the My Documents folder. The secondary drive contains a small partition for the Windows Page File. (Microsoft recommends that the page file be located on the 1st partition of a physical hard drive separate from the drive containing Windows.) The 2nd drive also contains two other partitions, which I use for internal backups. I have created a folder on one of the backup partitions My Documents-Backup.
Whenever I create a new document or update a document, I save it. Then I go to the Start menu, locate the new/updated document in My Documents, right click and select Copy to Folder. I choose the similarly titled folder in the My Documents-Backup folder (such as My Pictures-Backup or Letters-Backup) and add the copy/update there. Thus I backup every document just minutes after I add new information.
When I upgraded my primary hard drive from an 80 GB model to a 300 GB model, I removed the old drive and bought an external USB enclosure. I plan to use that new external hard drive as yet another backup, although I'm not as diligent about that process. I figure once every 2 or 3 months, I'll create an external backup on that hard drive.
I suppose I could build a RAID system to do all this, but a computer overhaul isn't in the budget right now. This system is fairly convenient for me. Almost anyone can afford to do it because hard drives are relatively inexpensive these days. I bought the 300 GB drive for just $99 at Newegg. If you only need an 80 GB drive, the prices would be much lower than that.
It's always possible that one hard drive will fail but it's highly unlikely that two hard drives would fail at the same time. Since I live in a high-rise apartment building, flood damage to my computer isn't a risk. I think only an electrical surge could knock out both hard drives at the same time but I think most modern apartment buildings have some kind of additional surge protection that standalone houses don't.
Anyway, that's my backup process. It's pretty easy to do, it's inexpensive and I never risk losing more than a minute or two worth of new data.