From my experience last summer with a failing Powerbook drive, they can fail by degrees. Periodic refusals to start up, various odd behaviors, followed inevitably be a final refusal to repair a hard drive with Disk Utility, attempts with DW that freeze and then...invisible hard drive. Apart from the last couple of steps, occasionally completely normal behavior may occasionally occur, giving one irrational hope that one has "cured" whatever ailed the beast. Oh yeah, been there, done that!
Back up. Always, always, always. Once a day if you're doing valuable work that you wouldn't want to have to recreate. External hard drives are cheap - your time isn't.
Dakota, you should be able to copy your documents from the back up - I don't know if I'd advise you to do more than that, since you don't know what exactly caused the problems in the first place. As for system preferences and putting things back into the dock, those things shouldn't take long to do, so I'd be inclined to do them again by hand to avoid copying any corrupted files. Your desktop pics can be copied over - and then used.
As for the 10.4.7 update, I've read a lot of scary stories, (though most have eventually reached a resolution) and so far haven't gone anywhere near it myself, though that's more to do with the fact that I've been too busy than anything else. I'm actually still on 10.4.5 with this G5 - again, no time and a lot of scary reports of things I didn't have the time to deal with if they arose. Not that I don't have a fallback - I do have two complete backups of my HD, and a simple restart is all that is required to get me back in the running again if things go pear-shaped with an update. It's just the time and potential nuisance factor.
