Basic Backup question

Running XP Pro, 500GB hard disk formatted in NTFS.
I have 70GB on my drive, including 36GB data.

I used to use a program called "Drive Image" and made an image of my drive
and saved it in a separate partition as a backup. This worked well for a
long time, then one day while making an image the electricity was cut.

Chaos, it seems my drive failed (?) anyway, computer hospital saved most of
my data, installed a new hard drive and reinstalled XP. I lost all emails
and Outlook contacts. Meanwhile I had lost the "Drive Image" disk so could
not install it to make backups.

I have gone to AccessoriesSystem Toolsbackup and it appears the only way
to make a backup is by a floppy disk. Since I have way too much to backup on
a floppy(s), I bought an external hard disk with the intention of using it
to backup my computer.

Am I on the right track? (Sorry for the long tale).
Patti