Here's how it works: save your work periodically with a filename bearing a number that changes with each save. Let's say you're writing a story called My-Story.doc. Start by going to File>Save As and naming the document something like My-Story-1.doc. After writing a few paragraphs (or a few pages, depending on how often you want to update your saved files) name the document My-Story-2.doc and so on.
In this example you might end up with nine documents, with the final one named My-Story-9.doc. The other eight would be backups of what you had written up to a certain point, and could be deleted whenever you are satisfied with the final version. In the meantime, you will have given yourself extra insurance against a file being lost due to a power failure or having accidentally deleted it.
Saving Files to Other Media for Extra Insurance
For added security, important files should be copied to an external hard drive or a flash drive or a CD, or sent to another computer. When writing these columns, for instance, I often email myself whatever has been written up to a certain point, and use one of my web-based email accounts such as Yahoo or Gmail. In case of a computer crash I could then retrieve the email copy of my work on another PC.
Copying a file to a flash drive or external hard drive is simply a matter of dragging it from My Documents onto the appropriate icon in your My Computer folder. Copying to a CD is similar, depending on the options chosen with your CD-burning software.
Another great way to save backups of important documents is to send them as email attachments to yourself via a service such as Gmail (Google Mail). Google offers 2.5+ gigabytes of free email storage with each account. I have four separate Gmail accounts, which translates to 10+ gigs of free storage.
This helps me sleep well at nights.