External Backup...
This backup is done to a removable or portable medium OTHER THAN A CD.
During this backup only the backup folder is copied to either a:-
To perform an External backup you will need to perform a Backup first as the data copied using the External Backup option will be copied from the Backup folder.
So that the backup is easily identifiable the 'add date' option is used creating a folder with the date of the backup on it.
Backing up All Files...
This option will backup all of the data files to a removable backup media