New To Backup Management - Learning The Basics

Up until now I have not managed a site that needed backups, but that is about to change.

I have a lot of questions, and they are newbie questions. Hope there's some patient people who have time to respond to some of them. If there are tutorials or articles you can recommend that would bring me up to speed, that would be most welcome too.

The project has 1 domain with about 100 subdomains. Each subdomain will have its own CMS and MySQL database.

All will initially exist on one shared server (HostGator reseller account), but will likely be moving to a dedicated or managed server shortly.

Ideally, I would like to have the hosting company manage the backups automatically. I saw a managed server package from webmasters.com that includes automated nightly backup. I am wondering that, if lets just say only 5 of the subdomains had an issue - would I be able to restore just those 5 - or would I have to bring all 100 subdomains back to the restore point?

I am also looking at other options, that I can implement before we move to a managed server.

Those options include:

1) Use CPanel to create a backup on a daily or weekly basis. I think, if memory serves me, that creating a backup of the domain, would include all the subdomains and databases. But - like my earlier question - I think that I would have to bring all 100 subdomains to the restore point if there was even 1 problem.

2) Use an FTP program to create a backup on a daily or weekly basis. I suppose the only investment for that would be my time, and an external hard drive. This solution would allow me to isolate certain subdomains. My question here is - in what file/folder are the MySQL databases stored (its not obvious to me.)

3) Move to a host that provides nightly backups even for their shared servers...