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Disk encryption and disk backup play two distinct roles and should be considered in the context of overall system security, be it one laptop or a whole enterprise network. System security is all about maintaining the confidentiality, integrity and availability of the system and the data entrusted to it.
Therefore, using encryption to protect data from prying eyes is not the same as securing the information. If someone steals the encrypted disk, you can derive a valuable dose of comfort from knowing that the thief will have a hard time accessing the contents. If those contents include personally identifiable information (PII) pertaining to thousands of customers, that encryption will help ensure the confidentiality and integrity that your customers were promised when you requested the data from them.
So the simple answer to the question is affirmative. Backup is a must, and whole-disk encryption should be considered as well, but of the two, backup is more critical. Where the two mechanisms come together is encrypted backup, which is definitely something to consider if you are talking about adequately securing sensitive data. The combined approach allows programs to encrypt the data as they write it to the backup media, be it tape, removable hard drive or network server.
Regardless, backup media should be stored securely and separately. In other words, there should be at least one backup safely stored in a different location from the original. Imagine going to the trouble of making regular backups, but then storing them all in the same office as the drives holding the original data. If the office is burglarized, everything may be lost. It would be little consolation to know that the thief can't get at the data because it is encrypted; it would be a huge relief to know that there were a copy of the data in the company's safety deposit box at the bank.
More information:
Learn about the whole-disk encryption benefits of Vista's BitLocker.
A SearchSecurity.com reader asks expert Ed Skoudis, "Are encryption products better than self-destructing data?"
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