The ABSOLUTE MINIMUM is backing up critical files to MobileMe. But this is likely to leave you without things you want, especially as you add music, movies, etc. to your computer.
The minimum smart choice is an external hard drive either with Time Machine or as a bootable backup made with SuperDuper. I like the Western Digital My Passport series of small drives - they're about the size of a deck of cards, and I just got a 750 gig model for $89 at Costco. Back up with SuperDuper once a week or so.
A really smart choice is to get three of these drives, use one as a Time Machine disk for incremental backups, so you can recover a lost file easily, one as a frequent bootable backup disk, and a third one that you use with SuperDuper every 3 months or so, and keep at a separate location (parents, friend, wherever), so you still have most of your stuff when/if your computer and the backup disk you probably have sitting within a few feet of it are stolen, flooded, caught in a fire etc.
Hard drives fail, things get stolen, water pipes break, etc. etc. etc. etc. If you have data you care about, protect it. The hardware can be replaced in 10 minutes at the Apple Store. The data is very literally irreplaceable.