Having an external drive is definitely a good idea. I personally stick to Western Digital drives and would recommend this one:
Newegg.com - Western Digital My Book Essential 1.5TB USB 2.0 External Hard Drive WDBAAF0015HBK-NESN
If you don't want to buy a new drive, you can partition out your current drive into two drives and move your data to the second drive by following this tutorial.
Copy all the files to the data drive or your brand new external and reformat. Also, you mentioned that you have had the computer for about a year, so you either have Windows Vista or Windows 7. If you have either, you can install Windows on the drive without deleting the current files on the drive, but a complete format is always a good idea if you can without losing data.
Humans are the only creatures that won't live up to the their potential. Give everything your all. When you die, die on E.
So I ask you, what do you intend to do now?