CDs is one method; an external hard drive is another method. Obviously this means buying a hard drive which will cost some amount of money (more than several CDs), but it also means you can backup your entire hard drive.
You can go as far as you want with backups. If you're only wanting to backup your personal files (pictures, documents, etc.), then backing up to CDR is probably your best bet as the above say. They're cheaper than DVDRs and have better error-checking, plus with your data over more discs a single damaged one will cause less damage.
The advantage that the external hard drive has it that of course you don't have a load of discs lying about, and as long as you buy one at least the same size as your internal hard drive, you can do a full drive backup. This makes it very easy to get your system back to where it was if you have any major problem like your internal drive failing.
With just CD backup of your personal stuff, you'll still have to go and install all your programs again and get things the way you like them.