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Just received the drive you suggested. What should I do before plugging this in?

Ooooops... I see Weaselboy beat me to it...

Plug it in and format it in Disk Utility using a GUID partition Map (under Partitions) and the Volume as Mac OS Extended (journaled). It should default to these.

Then you're good to go...

In Time Machine Preferences, select which drive(s) you want backed up, and select the drive to back up to. That's it... then make at least one back up and you can set it to back up regularly after that.
 
I use a quite simple set up, I plug in a USB WD Passport 1 TB about once a week with Time Machine. Its efficient, easy, and reliable. Perhaps in the future I go in a different direction.
 
I don't bother with Time Machine - my usage habits don't need that kind of backup and it's a waste of system resources for me.

I use SuperDuper to make a clone backup on an external HDD and use 4 different HDDs and rotate them. I always do a clone backup before a software update or installing something new.

Time Machine is fine depending on your usage habits.
 
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