Best option is an external HDD. Next best option is DVD/CD-RW's. There's also other portable external storage devices such as zip or super floppy, flash drives, etc. Or even better would be to use an ethernet cable to another computer & network them. That would make transfer very fast & convenient.

As for what to back up, don't forget to backup your entire incomplete folder so you still have your partial downloads. And must include the download.dat & .bak files from that folder. When you reinstall LW, close it. Then replace the new incomplete folder with the old one. But must only be done whilst LW is closed!!!

Some people have more than one OS on their system. I don't know if it's possible with Vista but should be. But that would probably mean having one OS on one drive & another on a separate drive, I don't know. That's what I do, but I use a mac. A windows user with experience with doing this might be able to help.