DVDs or even Blu-ray discs don't really fit the bill these days. Your backup should be an external drive, either a hard disk for cheap storage capacity, or a SSD for fast operations, compact size and reliability. Several options there:

• A cheap USB 3.0 drive that you can take out with you or put in the safe;
• An eSATA drive, that's not really such a great option anymore with the upgrade to the faster USB 3.0;
• A NAS box (basically a tiny computer and storage) with one or several hard disks or SSD drives. The last one I read about had 4 hard drives of 6 terabytes each, 24 TB total. Should be plenty enough...  ;)  Some NAS boxes are wireless too, so you can hide it from thieves.
• A hard disk or SSD drive in a remote location if you have fast local network or Internet. It could be for instance the farm computer's drive to backup the shop's computer (and vice versa), or another family member's computer.
• A last option is the cloud, such as Microsoft OneDrive or Google Drive, but it shouldn't replace local backups altogether. However, it's a great way to achieve near 100% recovery rate on your important documents, as such a high rate can only be achieved with 3 copies of each file, for instance the main working copy on the computer, the local backup, and the cloud backup. Other clouds more or less dedicated to backups are Backblaze (recommended), Carbonite, Dropbox or even Apple iCloud.

Backups come in different forms, there are the regular daily backups, usually very fast because they often copy only the bits that changed from one day to the next, not the whole files if only a small part of the file was changed. There are also the system images, that allow you to restore a corrupted or failed system drive. Disk images usually take all the system drive (in a compressed form), so it's a good idea to split the system and data in two separate drives or partitions, on the same physical hard disk or SSD, or on separate ones. Dells probably have a special partition to allow you to restore the factory system, and you probably still need some special USB key or something if you want to restore the system image if the system drive is fried.

Regular backups also come in 2 different forms: Full or incremental backup. You perform a full backup like once a week, and an incremental one every day until the next full backup. This way, if you lose your data on day 3 of the week, you only need to recover the full backup and the 2 or 3 small incremental ones from day 1 to 2 or 3. Don't hesitate to backup often, not just at the end of the day. Backblaze will for instance backup your files automatically as they change, and it stores one month's worth of file history, so if the last 4 versions of a given file were corrupted, you can still recover the fifth version before the latest one. These backups happen in the background, usually starting when the computer is idle, but they can slow your Internet down for a while if you don't have a fast connection.

The best option if you need lots of storage is to get a fast SSD for the system, and a cheaper and slower hard drive for your personal data. If you don't need much storage, a big SSD or a small hard disk split in two system and data partitions might work better.

Windows 7 Pro has built-in backup and restore solutions for regular backups and system images. They are very handy and easy to use or schedule to run automatically, but I don't like the format of the backups very much. I prefer to have a direct access to the different versions of the whole files rather than seeing compressed files under weird names that do not tell me anything about what's wrong with them, and that I cannot compare with windiff, for instance. So I use robocopy to copy every new and modified file.

Think also about archival, not just backups. Archives are basically for stuff that you want to keep accessible in case, just not on the main computer. Then you can delete these files from the computer once they are archived. Archives are usually long term storage, like family pictures that you don't need frequently, or big files such as ripped movies, which would take just too much storage on the computer. I watch all my movies from ripped DVDs or Bluray discs. I ripped all my CDs too, but these ones are live on the main computer, not just on the archive or backup drive. With a big hard disk, it's easy to keep both the backups and the archives on the same disk, and have spare room for other usages, like hosting the backups of each family member's computer, ripping TV shows from special software that connect to your TV box, etc. Don't forget that you still need 2 copies of your archives, since you don't have them on the main working drive anymore. So, a second archive box, or a second drive in your computer. For instance, if you have a SSD drive for Windows and a big fat hard drive for your data, you can optimize that drive by reserving part of it for archival purpose. If you don't have lots of data to archive, you can just keep it all on the main data drive and include it with the regular backups.

Another handy option if you have an external USB drive is to format it with Windows too, so you can boot from this drive in case the system drive got corrupted by malware, for instance. You can select at startup from which drive to boot, or set up the BIOS to ask to select the drive manually or to select it automatically.

In summary, a 256 GB SSD drive in the main computer for the Windows system and programs, a 2 terabytes hard disk also in the main computer for data and archival storage, a second storage on an external NAS or USB drive or on the hard drive of another networked/Internet computer for backups and archives, and cloud backups for your most critical documents as a third copy always accessible even on the road. Even if you don't have fast Internet, upload speeds are good enough for such documents which are usually small in size, like contracts, scans of ID and vehicles papers, etc.