A while ago I saw a feature of The Gadget Show (one of only a few great shows on Channel 5) all about backing up personal computer data. Your data can be lost due to virus infections, accidental deletion, hardware/software failures, power failures, etc.
I personally have a huge file of photographs, documents and music that would be awful to lose, especially the photographs. A while back our computer died and it might have been possible to get someone to trawl the dead hard drive for the data, but I had a separate external hard drive as a backup so the files were readily available.
However, what would have happened if there was fire or theft? I would be stuffed! Therefore, I researched online backup facilities and decided to use the one recommended on The Gadget Show - it's called Carbonite. For $50 a year, all my data is backed up - I think it's a small price to pay to protect memories and to avoid potential hassle if you lose data.
If you don't backup your files, you are mad. If you don't use an online system as well, you may be taking risks - so consider it by doing some research yourself... please!