Data Backup for Windows XP Upgrade

I am upgrading from Windows 98 to Windows XP on my 2 year old Sony laptop. The Sony website suggests that I “backup data, software and configuration information including connection settings for my ISP, access nubmers and addresses, network configurations, serial numbers, registration information, software updates, device drivers and other software required by third-party hardware devices.” As I don’t have a CD burner nor a zip drive, is there a simple way to do this? Any websites out there with advice on such? As a home user, the need to back up data has never been necessary, so I’m unsure as to the need or extent of doing such. Thanks!