Backing up your (pictures, movies, doc's, etc.) to an External Hard Drive is a good idea, however it is not a good idea to have them only on one drive Internal or External. If you what to keep your data safe and remove it from your Internal Hard Drive, then you really should have a second External Hard Drive to back up the first.
For moving iPhoto, iMovie and iTunes to an External HD, see the following links:
iPhoto: How to move the Library folder to a new location
iMovie '11: Copy or move a project to an external hard disk
iTunes for Mac: Moving your iTunes Media folder
Doc's and other files can be copied or dragged and dropped onto your External Hard Drive(s).
Alternately if your Internal HD is getting full as balboa suggest, then you may only need to move Movies or iTunes to an External HD to free up some space and get your iMac back up to speed.
To Erase and Install see > Mac OS X v10.6 Snow Leopard: How to Erase and Install
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Message was edited by: den.thed
You need to upgrade your RAM to 2GB or more for your given usage even in Snow Leopard.
Plus, Lion needs a minimum of 2GB and 4GB is better for even a lite user.