Looks pretty complicated for a Joe Ordinary like me!

OK. Let's break it down a little.

Removable device

The important thing about a backup is that the backup device is not held on, in, at, or near the computer system.
If your back device is a second hard drive bolted into your computer, when your computer is stolen, catches fire, is trashed by a virus or befalls any similar misfortune, your backup drive goes with it.

A removable device is a backup. An internal device is not a backup.

If you are paranoid and live near an airport, you'll store your backups a mile or so away. "I can survive a "plane crash". Otherwise you'll keep your backup in a separate room. Why? Because the world is full of idiots like me who react by reaching for the backup and repeating the same idiotic action that got my main data into trouble in the first place. Keeping the backup in a separate room gives me a few extra seconds to contemplate what I'm about to do.

I have always been served well by sitting down and thinking before restoring files.

If you are backing up to a removable device and storing that device away from your computer, that's a good start.

Dedicated device

The device should be dedicated to backups.
Keeping files on a device like a general-purpose memory key is not a good idea. It is too easy to trash your backup files during an ordinary working day by unthinkingly tapping the wrong key and destroying your backup copies without realizing it, until it is too late.

The Lot

I have no faith in a human's ability to divine what is and what is not important on a computer system.

Copying your "My Documents" folder will not help you when you are trying to restore your email address book, your browser bookmarks, your Word Processing templates or options and settings, and all the other things that serve you on the computer.
Sure, you can work out most of them, but you can't work out or obtain all of them, and the last thing you want to do when your system crashes is to spend hours laboriously re-creating your working environment.

Even if your computer is a personal computer at home, you are losing an unbelievable number of hours spent gradually building up the base of data that makes it your computer.

What does this all mean?

In All My Years ™ I've not come across a simpler idea than backing up the complete system to a removable hard drive every day. First thing each morning. Slide in a drive, click, wait, slide it out and get on with life.

No sets of CDs to burn and catalogue (and search at a later date).

No decisions to make about what is and what is not to be copied.

No fears of missing anything.

Just letting Windows grab everything that is new or is changed, and relaxing.

If you are worried about how to wring each scrap of devious information back off the backup during recovery, don't sweat that either. As long as you have it all, any service geek can get it back. It's when you don't have it all that the service geek has to break the bad news to you. "If it ain't backed up, it can't be reclaimed".