The whole Idea, of backing up your C: partition, as stated in the original post, is to never have to reinstall your programs and data in case of a Hard drive crash.
A good backup program, like Ghost or Acronis True Image, will basically make a 'SnapShot' of your C: partition, so if something happens to it, you can just do a 'Restore' of your backup Image File and be right back in business.
For that reason, it's a good idea to do backups OFTEN, like once a week, if you have a tendency to add programs or data files often.
Backup Image files should not be on the main Hard Drive, just in case it Crashes. A second internal drive will be the fastest, when making backups. An external drive, offers better protection, but is MUCH slower. DVD's offer the highest level of protection, but are by far the slowest. But they can easily be taken "Off Premises" for the ultimate in backup protection.
Cheers mates!