#2
Time Machine is the software in the Mac that will back up your data. You need a device to back that data up to, which is where your Seagate drive comes in.
The instructions for configuring Time Machine are found here:
http://support.apple.com/kb/HT1427
Follow the steps under "Setting up Time Machine backups using an external drive". Time Machine will continuously back up any changed files on an hourly basis, just leave the drive plugged in and let Time Machine do its thing.