I will second Dropbox if as a free and "easy" software if you are good with the basic account's 2 GB limit (or can recruit some friends via referral to up your storage). I use Dropbox since it supports linux, windows, mac, and even mobile devices(IPad, Android, BlackBerry). SugarSync is another free storage solution which offers 5Gb of storage, but won't work for me because they don't have a native linux client and I can't be bothered to set it up to run under WINE(SugarSync is more flexible also in terms of where you can put things to "share/backup")

As Anstett stated, if you want rock solid protection, go with something like Carbonite or Mosey or something like that(roughly $60 a year for the basic plans).

The main thing here is get something automated that you don't have the think about. While external Hard drives are great for backup, the truth is that most people just don't do it often enough. This is especially the case with Laptops where you have to be extra proactive to hook it up to the drive.

Not sure about the others(but I fairly sure they do), but Dropbox version's your files, so each time you save, they have a snapshot of all previous versions to which you can revert....and really, just have many times have you accidentally merged layers in PS and wish you had not and wished there was a way to undo.... ditto saving over a jpeg file (original) with an updated copy that you wish was not. Of course, this assumes you have an always on internet connection and that the time between saves allows enough time for the file to sync to the DB servers before you next save.