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No real need to backup anything unless they don't have Steam Cloud support.
So does every steam user have a steam cloud - is it built into steam?
Yeah, I hope you can tell I'm relatively new to steam lol
What about when you get a new game? can you add to (or update) an existing backup file?
No, not all games have Steam cloud but you can see the ones that do if you click on "list view" button on the upper right of the steam client next to where it says "view".
Now when in list view you can sort your games by different collums and there should be a Steam Cloud column which just has the cloud symbol. The cloud shows that the game supports it.
Steam backup is intended to be used if you want to uninstall a game but still save a backup of it so you don't have to download it all again. If you have fast unlimited internet you might not need it.
You can always download the game as many times as you want on as many PC's as you want. If downloading games is not an issue for you it should be fine.
Also backups doesn't keep savegames.
Thanks an absolute tonne for the clear explanation and especially, the link. I've only been using steam properly for just over a week... still a bit of exploration/"getting used to" to do.
http://pcgamingwiki.com is also good for finding fixes for games and it has guides for stuff like backups.
They also host this massive list of games that has additional DRM that might keep you from installing them to many times: http://pcgamingwiki.com/wiki/The_Big_List_of_3rd_Party_DRM_on_Steam
The main ones you should watch out for is Hardware-based DRM. You own crysis which is on that list because it has a 50 machine limit. So Crysis is a game you can't install an unlimited times with no issues.