you could go in for a portable hard drive of 160GB or 250GB. These are USB compatible so backing up data should not be too much of a problem. Additionally Software like Nero BackItUp are given when you purchase a portable drive. So that would make backing up data much more easier..
2) they dont make 160GB flash drives. the biggest you can get is 128GB, but its $400
3) backup your hard drive to DVDs instead. each DVD holds ~4GB. it will take a lot of disks, but it will be cheaper and more secure. you can also just get another 160GB hard drive to back it up to.