What is THE Best Practice

My C: drive is using about 250GB and is W7 Premium 64bit.

I have a 1TB drive for backups, called Y:

I am confused on choosing a backup strategy. Which of these is best?

a) Non-Stop backup of C: to Y:

b) Scheduled backup of C: to Y: - how often

c) Is a sector based backup more reliable, and does it only backup the changed sectors?

I am also having difficulty in building a recovery CD as my system uses RAID 10, but I'll try reading the Bart CD threads for that...