I have 320GB to use as backup drive with Time Machine. Do you think it is beneficial to backup OS X or should I skip it to save space? I do have the reinstall OS X disc.
Your reinstall disks don't include documents/photos/music.... yes backing up is essential. I don't use Time Machine though- SuperDuper! is my choice.
What I dont backup is Applications and Caches (Change every hour)
For removing the caches, are you just removing home folder>library>caches ?
^ in Time Machine with default prefs go to your cache folders and then youll see they are not backed up by default as the folders back in time go black. also search for "cache" in that article youll see a poster says that caches arent backed up by default.