Windows 7 Backup & Restore - failure and solution - what now?

I have a Dell Inspiron N7010 laptop (64 bit) with Windows 7 operating system.  I have had it since Aug 2010 and had no problems backing up using Windows Backup and Restore until about a month ago.  Suddenly I got error code 0x80070020 and message saying backup did not succeed.  I tried all sorts of solutions which did not work until this one...

• Change Windows Backup and Restore settings by clicking on the user and show files, then uncheck the AppData Folder. 

I  was able to run my backup successfully but because this folder was not backed up it is only about half the size of previous backups.  Does anyone know what I can do to backup the AppData Folder as well?  Also, what happens if I don't get to back it up?

I would appreciate any views on this!