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Upgrading To Windows 7 – How Should I Backup Vista First?

I just received my upgrade disk for Windows 7. I want to upgrade from Vista, but in case something happends I don’t want to lose anything currently on my CPU. I have a 1TB external HD. What is the easiest and best way to back up everything in case something happends? Also, what is the difference between backing up or creating a recovery disk? What should I do?

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