Do whatever works for YOU - it may take some experimentation to figure out how you want to back up. Remember your goal is to simply have more than 1 copy of your data, such that it is unlikely to have both copies destroyed at the same time.
I have a relatively intricate system that has me back up things at different rates depending on size / how much I use it:
- My Dropbox (<500MB, stores my notes and some research-related goodies): Backed up every day by automatic script to my home server which is NOT cloud synced. The script keeps 1 week's worth of these backups.
- School work (<200MB): I always have a copy on both my USB key and my home computer. The home computer copy is the backup. I use Unison <http://www.cis.upenn.edu/~bcpierce/unison/> to do the synchronization as it's cross-platform.
- Other documents, saved games (2-5GB): Backed up once a week by automatic script to my home server. This includes the local copy of my school work, so in essence I have 3 copies of my school work.
- All the stuff on my home server, including pictures, videos, Steam downloads, other installers (>70GB): Backed up once a month to an external hard drive. I'd love to automate this part but the external HDD can't plug itself in

EDIT: I used to keep image backups of my computer, but my Windows install is so messed up from switching between a GeForce 7900GS, Radeon 4870, GeForce 550Ti, and Radeon 3650 that if my main OS has a dump I'll just reinstall manually
Compared to a lot of people here, I'm able to do this using "only" two 1.5TB drives (no RAID). One copy of all my stuff fortunately takes up less than 100GB.
My files backup is performed by Cobian Backup on Windows and fwbackups on Linux, depending on the OS the files are stored on. I'm OK keeping track of all of this (essentially all but that last one is automatic).
Remember that Dropbox is NOT a backup solution if you use the desktop application. If your account gets hacked and all the files are corrupted/deleted, the desktop app will happily sync and mess up your local copy as well. Also, if your computer gets a virus, the infected copies will be sent back up to your web copy. The same goes for Windows Live Skydrive if you have automatic sync (e.g. with Windows 8 or Windows Live Mesh if that thing still works).