What is best backup strategy for ALL files?

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What is best backup strategy for ALL files?

I have a Toshiba Qosmio G35-AV600 running Vista Home Premium with two 80GB hard drives and one external USB 160GB hard drive. What I want to do is to backup my entire hard drive including all program files to my second 80GB hard drive, not JUST the files like the Vista backup program does. I want to do this in case my c:\ hard drive fails I can boot from my e:\ drive and I don't want to upgrade to the Vista Ultimate edition to be able to do this. I am also trying to avoid buying a backup program.

What are my options here and how do I go about doing it? Am I even thinking correctly here or is there a better way to do it?!?

Your thoughts and comments will be greatly appreciated.