The 2 important options in my opinion are simple recovery and full recovery.
With simple recovery you can only perform full backups and do not have the ability to perform a transaction log backup so in other words you cant restore transaction logs you can only restore full backups. This is good for systems that it is not critical to have un up to the minute restore.
With Full recovery mode you can perform full backups as well as transaction log backups. With transaction log backups you can restore them on top of your normal backups with will give you a more up to date restore depending on how often you run the transaction log backup. Basically it depends on the criticality of the system.
Please let me know if I can assist you further. My aol screen name is michael40378