Before diving into SharePoint data protection and recovery practices, let's elaborate a little bit about the levels of data recovery.
Logically we have 4 levels of data recovery:
To wrap up check the diagram below (original diagram by Martin Kearn). I added annotations to help you understand more.
As a SharePoint guy I would recommend that you use tool for managing Data Protection and Recovery such as: Microsoft System Center Data Protection Manager 2007, DocAve Backup and Recovery for SharePoint and Quest Recovery Manager for SharePoint. Handling backups your self is a big responsibility, however if you come from a corporate environment you'll be stuck in a 6 months purchase order and enroll in a politics major league with the operations team, then I would strongly recommend to lose the headache and use available tools like STSADM and SharePoint Designer.
Content Level Data Recovery
From time to time users delete documents or lists by mistake, close web parts and update documents with incorrect information. If you were formatting a table in Word, and accidently you applied wrong format, by instinct you'll reach the magical ctl+z undo keys - don't you wish they exist in reality – and taraaa problem solved.
In SharePoint we have a crl+z key and it's called the SharePoint Recycle Bin. I won't look at the Recycle Bin as a backup tool as such, but it is defiantly the instinct ctrl+z. Content can be restored easily from there. The drawback in Recycle Bin that content inside does expire. In Windows it is set to a limited size and starts overwriting files. Same story goes for SharePoint but it is limited by an expiry date. By default items expire after 30 days.
Site Collections & Sites Level Data Recovery
Sites are too big to fit in the Recycle Bin from a complexity perspective. The only way to restore them is through-out previous backups. Currently I run daily backups for all my site collections, this comes very handy when you are restoring sites. Using Farm backups will consume big restoration size and time. Instead I keep my farm backups running for catastrophic failure recovery and I run in addition the site collection backups every night to be able to restore any sites in a super effective time.
Site Collections backups are done using STSADM and Windows Tasks Schedulers. The process is simple:
For restoring the site collection we use STSADM as well. Just launch the Command-Line and type:
Remember that you can only run STSADM on SharePoint server.
Sites require an extra step which is exporting the site from the restored site collection and import it back again. This can be done by using either STSADM or SharePoint Designer. I SharePoint Designer has a drawback, it can only export/import sites that does not exceed 25 MB of size. If the size exceeded it won't prompt at all but you will get the errors during the restoration process. The error will be something like this: Cannot find c:\...\exportsettings.xml. You can find the work around here.
To Export/Import a site using STSADM, launch the Command-Line and type:
Farm Data Recovery
When it comes to farm backup/restore operations we call it a catastrophic backup or a catastrophic restore. The catastrophic backup/restore holds up almost everything in SharePoint, from solutions, configuration, content and SSP. You can carry on these operations either using Central Administration (under the Operations tab) or STSADM.
Like site collection backups, you can place the command in a batch file and create a windows scheduled task to run it every day to insure that your farm is backed up.