back up, how important?

I've been backing up my computer to an external drive for some time now with mixed successes. I've recently upgraded from Vista to Wind 7 and now it seems to be more and more complicated but that's not what I'm asking about . When I do a back up it to takes up so much space on my external drive and I wonder if it's all necessary. I only really want to save my pictures and my documents. If the worst was to happen every thing else could be reinstalled or re established. I tried to make my own choices through windows back up but that's very confusing and I ended up doubling up, dual imaging? and got more than I wanted anyway.
I just wanted to know really how important is a back up and is it a good idea for me to just manually back up/save the things I want and perhaps, if I'm not asking too much, the best way to go about it.