Although most Mac OS X upgrades go smoothly, there's always a chance that something can go wrong. Hundreds of thousands of files are changed during an upgrade, so there's a possibility that one or more of those changes can cause your Mac to decide to not boot up properly. Without a backup, your data might be gone forever.
Before you purchase Mountain Lion from the Mac App Store in July and begin the process of upgrading, make sure you back up your Mac! To begin with, you'll need an external disk drive that is at least twice the capacity of the drive that's built into your Mac. USB drives are surprisingly affordable; a glance at Amazon.com today showed a number of 2 TB drives for US$120 or less.
Backups don't have to be difficult, thanks to Apple's Time Machine utility. Just plug your external drive into your Mac and OS X will ask if you wish to use that drive for Time Machine backups. Answer in the affirmative, and backups begin immediately.
I'm personally a fan of bootable backups, meaning that if the primary hard drive in your Mac fails, you can boot right off of the backup copy. To create these backups, I use SuperDuper! ($27.95). Every night, the app performs some file maintenance, then adds changed or new files to a full backup (SuperDuper! includes a scheduling tool for setting up backups at regular intervals). To make sure that the backup is indeed bootable, I test it once a month. Another amazing app for bootable backups is Carbon Copy Cloner (Free, but $20 recommended).
To test your bootable backup, go to System Preferences and click on "Startup Disk". Click on the backup drive icon to select it, and then click the Restart button. If all is well, your Mac should boot from the backup drive.
Daily backups should be part of your Mac OS X routine already, but if they aren't, then the move to Mountain Lion should provide your impetus to start backing up now.
For many new Mac owners, your move to Mountain Lion represents your first major upgrade. To help users prepare to make the jump, Steve Sande and Erica Sadun wrote Getting Ready for Mountain Lion, an Amazon/iBooks eBook. It's aimed at first-time upgraders and people looking for hints and tips about smoothing the transition. We're sharing some of our tips on TUAW in a series of posts about the 10.8 upgrade. OS X Mountain Lion will be offered for sale in July 2012 for $19.99.