How do I store (backup) all my documents on a CD?

Thanks in advance.

A CD can only hold 700mb (approx).

Windows has a backup utility that can do backups of the data you want preserved. You can use that program to create your backup image, then use Nero or whatever CD-writing software you have installed to copy that backup image onto a CD (or several if the backup image file is bigger than 700mb).

The Windows Backup tool cannot write directly to CD. Sorry.

Here is a link to a page telling you how to use the Backup software already installed on your computer:
Windows XP Backup Made Easy

The program NERO (a CD writing program) actually has a decent backup capability built into it, you may be able to get it all done in a single process just doing it all through Nero from the start.

Another option is to use CD-RW discs and copy the files via Windows Explorer or a scheduled batch file. There are freeware synchronization tools a Google away to make the process less tedious and automated.

A third option outside the parameters of your original question is USB flash memory drives. They have much larger capacity, are easier to use, faster, and in my opinion more reliable than optical media when you need to do a restore. I also favor standard hard drives in an external USB enclosure over optical media.