Server administrators usually prefer a daily backup that is saved for a certain amount of time. This can be achieved either via the control panel or another method, such as rsync. A control panel backup will make a copy of the user data, while rsync makes a copy of the entire image.
The advantage of the control panel backup is that it is easier to restore. The advantage of rsync backups is that they require less space if you plan to use rolling backups (such as daily backups for a week). This is because rsync is a differential backup method (only saves the differences between backups), while an FTP-based method saves a complete copy of the data (often in a tarball).
In general, we would recommend the control panel backup if you want a daily backup that always overwrites the previous version or if you want to be able to easily restore user-level data. If you want to use rolling backups that go back a long time or want to have a copy of the entire virtual server, we recommend rsync.
If in addition to a rolling rsync you want to make a daily overwriting control panel backup, do not make the latter on the server itself. This will cause the rsync backup to grow enormously, because a new large file will be written to the server every day.
Databases and rsync backups
If you use rsync we also recommend that you make a dump of the database before you perform the periodic backup. This is because all backup protocols work best with static files, which a database almost never is. By creating a static dump file you avoid this problem. We suggest the program AutoMySQLBackup for making MySQL backups. The CloudVPS backup script incorporate this possibility.
If creating a dump results in performance problems, or if you want to be able to restore the database to any previous state, it may be a good idea to replicate the database to a second VPS. This second VPS can then be used for the backups.
CloudVPS rsync backup script
If you want to setup a backup with rsync, we have our own script which you are welcome to use. This script allows you to automatically include database dumps.