My iTunes library takes up too much space to keep it on my laptop, so I keep it on a portable external drive. I have second external drive where I dock my MacBook at my desk where I keep a backup using a free program called "SyncTwoFolders". I select the iTunes folder on the portable drive and the iTunes folder on the backup drive and tell it to sync every week or whatever. Works well for me.
Basically the two things you need to back up are the iTunes folder that stores all your media, and the iTunes Library file that holds the database of everything in your iTunes library (playcount, cover art, playlists, etc.). Sometimes the library file can get corrupt and you have to re-add everything again. When this happens you don't lose all your media, but iTunes forgets where it's at and you lose playlists and stuff like that.
Hope that helps.