Backup is optional, but its a good idea to backup because there is a chance of loss of files during the upgrade. You can buy any external drive, USB or Firewire. Both will work fine with Mac. The main problem is, you are using Mac OS X 10.4 Tiger
. 10.6 Snow Leopard
requires Mac OS X 10.5 Leopard
pre-installed. So you need to upgrade into Mac OS X 10.5 Leopard
first then only you can upgrade into Mac OS X 10.6 Snow Leopard (10.5 Leopard costs $200-$300)
So buy Leopard Retail Discs and upgrade into it first. Its not very easy to get Leopard from Retail Stores like Best Buy, Apple Store etc but you can buy it from online stores like ebay.com or Amazon.com (Make sure you're buying a Mac OS X 10.5 RETAIL Discs
and not Restore/Gray Discs
You can buy Snow Leopard discs from Apple store or from online for $29.
You can use this application, Carbon Copy Cloner to backup your files. CCC will backup your entire hard disk, so if anything goes wrong, you can just restore your files easily : http://www.bombich.com/
Once you get the discs, just put it in and follow the onscreen instructions to upgrade.
Let me know if you need more help !