Backing up an Android device is a broad term, that entails various levels of backup that cover multiple aspects of the data on your Android device, using different tools.
In this post I cover the concept of NANDROID, which refers to a low-level backup of the device, including practically everything that resides within the partitions on the NAND flash of the device – kernel, ROM, apps & data, system data, etc.
NANDROID backup is a snapshot of your device at a specific point in time. As such, it allows restoring the device to the exact state it was when the snapshot was taken. This is a pretty good safety net when experimenting with the device.
NANDROID backup does not include data on the SD card!