
USB Key: Avoid these if you can. They're not reliable enough for commercial use.

An external hard drive is really the way to go. In combination with Time Machine, you have a complete backup solution.

Archiving (and not backup) is best done on optical media. Do two at a time for off-site archiving.
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Apple's Time Capsule does backups over the air! It doesn't get slicker than that.

This is what a hard drive with no enclosure looks like. They're really cheap these days. One hundred dollars gets you a huge drive.
Why backups? Drives fail. Drives are lost. Sometimes it's human error. Rarely it's not. That's why. People generally do backups after they have suffered a catastrophic loss. I'd like to prevent that from happening to start with.
It's done on a regular basis — like every time you've produced work of substance. What does that mean? If you have spent enough time on something that it would be painful to re-produce, it's a good idea to copy it onto another drive.
Archiving your work is done once you are completely done the project. That's different from backups, which are done while your project is still active.
You can use optical media like CD or DVD to do your archiving. They're cheap and reliable. Today, you can burn dual layer DVDs which contain about seven giga bites of data. That would probably be the equivalent of your whole three year program on one disk. Impressive eh?
If you're going to archive properly, it's best to make tow copies of your completed work. Keep one copy in your office and take one off site. This could be at your parents' or some other secure location. We do this in case there's a disaster in one of the two locations. It could be water damage, fire or anything else. Hey, you never know. Stuff happens.
When doing backups and archives, don't just copy over your document files. You also need to include fonts, photos and any other files related to the project. It may also be accounting files like quotes or invoices. It's a good idea to find everything related to the project together.
Apple has integrated very good backup software right into their operating system. After you have connected an external drive, you won't have to think about it. Time Machine does recursive backups of your hold drive.
This is a really great online storage site. You don't need to identify yourself. You can upload files without cost or giving up your vitals. Each upload is called a "Drop". Each can be up to 100 mega bites. You can make as many Drops as you wish. You can give them any unique name. You can even set the Drop to expire, deleting your files automatically.
There are many other online storage sites. Just Google "online storage". You'll see what I mean.
For the few of you who do not have fast internet access at home, online storage may not be for you. If you upload files at school, it will be tedious to download them once you get home. Again, an external hard drive is the best solution.
The best solution for backup is to use an external hard drive. Prices for hard drives have plummeted in the past few years. It's now possible to buy a fast, high-capacity external drive for merely one hundred dollars.
Using optical media, like a CD or DVD for backup is not a great idea. Even if you are using re-writable media, it's impractical to use if you are going to add and remove files within projects on the disk. Read/Write media is better for this reason.
USB keys should also be avoided. If I could ban them from use by Graphic Design students I would. They are very unreliable and very easy to lose. Use a portable drive instead.