Erica Sadun in TUAW on why you should use Time Machine on your Mac:
Time Machine is like version control for your life. It lets you restore files that you’ve lost or changed along the way, and does so in such a simple and elegant fashion that you never have to wonder “Did I back this up?” Time Machine just works. You hook up an external drive, set a few options, and let it go. Best of all, it’s bundled for free with OS X.
Is it the only way to backup files on a Mac?
The most secure way to protect data is to combine local and remote strategies. Time Machine is local, unless you have a really wide pipe to a remote location with your storage. If your house or office goes up in flames, the Time Machine drive connected to your system goes up in flames too. Not much to recover when your back-up is melty goo.
If you don’t backup your Mac, you do so at your own peril