Q1: Depends on how the external drive is formatted; if it's formatted as a FAT32 volume, then yes, you can back up data from your Mac to the external (and still also use it for backups from your PC). This is likely to be the case if you didn't reformat it when you got it--I think those ship FAT32 formatted.
If it's NTFS formatted, then you'll be able to read data off it from your Mac, but not copy to it. So, you'll either need to reformat it as FAT32, or get a second backup drive.
Note that, while the Mac can write to FAT32 drives, it's not what you'd call an "ideal" format--HFS+ is currently considered the most "native" format for Mac drives, and it supports a number of nice features that FAT32 doesn't. That's why you can currently only use Time Machine (the fancy Apple-supplied backup system) with an HFS+ volume.
So, if you're just backing up files (say, Word docs and photos), then your drive as is is fine. If you want to do a full system backup (as in, one you can boot from or clone back over in the event something happens to the internal drive), or to use Time Machine, you're going to need an HFS+ volume. Depending on how much data you have, the easiest way to get this might be to just buy another external drive (any brand will do--just reformat it when you get it). Alternately, you could repartition your MyBook into two partitions--a FAT32 one for Windows backups (Windows can't read HFS+ without additional software), and an HFS+ partition for Mac backups.
Of course, if you're not going to continue using your physical PC and just use Parallels on your Mac, then you can just reformat your MyBook as HFS+ and you're good.
Q2: Parallels will be running off a virtual disk image on your Mac's drive. You can back up this whole image if you want--it's huge (assuming Windows, a few applications, and a modest amount of data, probably 5-10GB), but since that's the entire Windows install if something happens it's nice to just drop it back in and be right back to the point you last backed up.
Alternately, you could just use Parallels' shared folder system to have a portion of your Mac's drive show up as if it were a network volume within the Windows virtual machine--effectively there's a little link. Save or copy your Word documents (or whatever else) to that folder, and they're now "outside" the Parallels virtual disk and will be treated exactly the same as every other file on your Mac's hard drive (plus, since Apple's TextEdit can read them you can also open or preview them even if you don't buy a copy of Office for the Mac).
As far as the files themselves go, remember that a file is just a file--a Word doc created on a PC is basically identical to a Word doc created on a Mac (between Word 97 and Word 2004, in fact, the formats were identical; the new docx garbage has confused things a bit, but still basically true).
I hope that helped rather than confusing.
