First, what are your requirements? DBs, large and small,
have both similar and different characteristics. What are
your SLAs, and what are your retention times?

YOu should use a combination of full, differential, and
transaction log backups to get you closer to that point of
failure. How many files you will need in your restore
depends on what strategy you take.

For example, if you do a full weekly, differentials every
day, and then transaction logs every n minutes or hours,
you would need the full, the latest differential, and the
right transaction logs.

The book SQL Server 2000 High Availability by MS Press has
2 chapters dedicated to backup and restore that may help