"Should I backup my entire hard drive, or just my data files?"
If you have a huge hard drive with lots of software on it, then backing up your entire hard drive can be a challenge. If you purchase an external hard drive to use as your backup you will need to make copies of your primary drive frequently to keep your external drive up-to-date. You will also need to make that sure you are using a backup program that clones everything, including the boot sectors. This is not trivial and usually requires creating some kind of boot disk, booting your computer from a special disk and duplicating your hard drive while your computer is running some specialized software outside of your normal operating system. If you go the route of backing up your data only, then you will have some much simpler and quicker options, however, in the event of a hard drive crash you will be required to reinstall your operating system and software before you can restore your data. Power-users can easily handle either method, but everyone isn't a power-user.
Christopher Null recently wrote a blog entry that says; "Do you feel comfortable reinstalling Windows and your various programs on a bare hard drive? If not, then back up everything. Power users can forgo the full drive backup and just grab data files, typically the stuff that lives in your My Documents folder." It seems to me that you need to be a power user either way. Duplicating the entire disk requires a certain amount of expertise for both the backup and restore. I think he has a very good point, but it is not as simple as that. Making a complete clone of your hard drive is not a bad idea, but you also need to do the data backups on top of that. Here is something that I posted a few weeks ago on the topic: Full Disk Backup vs Data Backup.
Whether you are duplicating your entire disk, backing up your data files only, or doing a combination of both, you will need a certain amount of computer know-how to successfully restore. If you are not a power-user or you are not sure if your backup methods are adequate, then you should enlist the help of a friend, relative, or professional who knows what they are doing. Don't wait until your hard disk is fried to find out that your backup is useless.