Vista - Backing up Folders

Someone mentioned backups a couple of days ago, and that got me thinking of
when I start to use Vista as my regular operating system, how will I
organize my backups.

In XP I point all of my programs to the appropriate work folder in "My
Documents". I have a Genealogy folder that is subdivided as to contents,
such as reports, images of documents, photos. Everything that relates to
genealogy goes into this area.
I also have a "Financial" folder for Quicken files and spreadsheets, a
"Work" folder, well you get the idea.
I know that anything in "My Documents" has to be backed up and set my backup
program accordingly. Now along comes Vista with the same idea, or so I
thought until I tried to create a new folder. It took me a while to find out
that it isn't allowed, I can create one in C:\users\Ray\ no problem using
explorer, however it's not visible in the folder view. I can also create,
and see, folders within the 11 main ones. Am I stuck with doing this,
creating my work folders under one, probably "Documents", folder, or am I
not looking at this right?

Now this whole idea of "virtual" folders and new search methods has me, and
I would suspect a lot of others, a bit puzzled. I haven't quite grasped the
concept yet, it takes a few head bashings before it starts to sink in. So I
would like to invite anyone that has some knowledge of best backup practices
and Vista file management to "bash away"

Ray