"Experience is simply the name we give our mistakes. "
Oscar Wilde
There are three basic types of backups. Each type varies in how it saves your data during the backup process.
The three types of backups are:
Full Backups
A full backup, like the name implies, backs up all the files you have selected for backup. This is the most straight forward backup, but it also takes the longest time and requires more backup space than the other two types. The number of tapes or disks you'll need will depend upon the total size of the files you are backing up, the size of the tape or disk you are backing up to, and whether you are using compression or not.
If you ever need to restore your files, you simply put the first tape or disk into the drive, run the software and select restore. The program will restore all your files into their original locations and life goes on.
The problem with using only a full backup system is that you are backing all your files each time, whether they have changed or not. As I mentioned before, this means that your backup will take a lot longer and you will require more storage space for your backup sets.
If you do not have a large amount of data, this may not be that much of a problem. If you do have a large amount of data, then this can become both time consuming and expensive, as you will need to have more disks or tapes on hand to complete each backup.
Differential Backups
When you use a differential backup method, you begin with a full backup as described previously. This full backup marks the beginning of your backup cycle, typically a seven or a five day week. During each backup after, the backup program reads your files to see which ones have changed since your last full backup. The program then backs up only those files that have changed. Each additional day of your cycle, the program will again backup all the files that have changed since the last full backup, including the files it backed up on the previous day.
The differential backup method requires less backup storage space than a full backup, since it is unlikely that all your files will change every day. However, since the backup does add each file that has changed since the full backup, the storage space required will increase each day until your next full backup. Differential backups are generally faster than full backups as well.
At the end of the week, you run another full backup and the process begins all over again.
If you need to restore your files using the differential method, you will need the full backup that you performed at the beginning of your backup cycle, plus the last differential backup you performed.
Incremental Backups
Incremental backups are similar to the differential method in that you establish a backup cycle and begin with a full backup on the first day of the cycle. The difference is that each incremental backup only backs up the files that have changed since the last backup.
Note the difference: Incremental only backs up data that has changed since the last backup, whether it was the full backup or another incremental backup. Differential backups up all the files that have changed since the last full backup.
Because the incremental method only backs up files that changed since the last backup, it is the quickest backup method of the three and requires the least amount of backup space during each backup cycle. The amount of space it requires will also vary with each backup.
The down side of the incremental method is that restoring your files takes longer and is more complicated than with the other two methods. You need to restore from your last full backup plus every incremental backup performed from the full backup to the last good incremental backup.
You will need to first evaluate your backup needs, then choose the backup method that best serves those needs. 
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