I've just reinstated my essential stuff when my HDD died. XP+documents+photos+ office/productivity apps = 10GB. Plenty easy to ghost to a couple of DVD-RWs. Do that monthly, keep three on the go at once, erasing the oldest each time you backup.
Then for your pron/other wasteful stuff, work out what can be reinstalled/downloaded. Like games. Then ignore those or create one-off backups for reinstallation.
The rest isn't really that important, so I'd get another big HDD in your PC and just mirror your data so its on two HDDs at once. Then if one goes down, you should still be OK to resurrect and recopy back.
With my HDD failure its come back to haunt me, so I'm going to start my regime this weekend. Prolly with a USB2.0 / Networked HDD just because its more convenient for streaming etc.