You can schedule full backups of your VMs, by exporting them in the local XOA file-system, or directly in a NFS share. "Depth" parameter allow to modify the retention (removing the oldest one).
Full backups are space consuming! But they allow a very simple restoration without anything to think of (the file will contain all the VM disks and information.
By default, Backup are compressed (using GZIP, done in XenServer side). There is no absolute rule about using compression or not, but there is some rules.
**Warning**: snapshots are not backups. They help to rollback to a previous state, but all snapshots are on the same Storage than their original disk. If you lose the original VDI (or the SR), you'll **lose all your snapshots**.