How Much Space? When it comes to drive capacity, you can never have too much. That said, if you're merely looking to back up a laptop that has a 320GB internal hard drive, a 500GB external drive will prove more than adequate.
But most desktop drives these days start at 1 terabyte (TB), and it's not uncommon to see deals on 2TB and even 3TB drives. Overkill? For many users, yes, but if you even plan on editing video or using your PC as a media center, it doesn't hurt to have that extra space--especially considering that it may cost only $20-30 more to bump up to the next size.
For example, at the time of this writing, Newegg has the Seagate Expansion 2TB USB hard drive for $119.99 and the Expansion 3TB drive for $139.99. That may be more storage than you'll ever need, but for an extra $20, why not spring for the extra space?
What Features? Don't go crazy worrying about drive specs. Although a drive that spins at 7,200 rpm will read and write data faster than one that spins at 5,200 rpm, you'll see much better overall performance by choosing a USB 3.0 drive and pairing it with a USB 3.0 port.
One feature you shouldn't overlook: warranty. Hard drives can and do fail (which is why you should always use a cloud-storage service for secondary backup), so look for the best possible coverage. Many drives come with a one-year warranty, but some are backed for two years or even three.
And if you're using the drive primarily for backup purposes, look for a model that's bundled with backup software--preferably the kind that runs automatically when you plug the drive in. Of course, if you've found a drive you love that doesn't include such software, there are countless backup utilities you can install for little or no money. (Indeed, Windows 7 comes with a perfectly serviceable backup program.)
By following these simple tips, you should have no trouble finding the perfect external hard drive for your needs--and your budget.
Veteran technology writer Rick Broida is the author of numerous books, blogs, and features. He lends his money-saving expertise to CNET and Savings.com, and also writes for PC World and Wired.