Question 1: Yes and no, a backup app is nice, but not necessary.
Quesion 2: The reason you would needa backup app is that the Market does not save any kind of saved app data from your phone. The only way to save that kind of information would be to back it up either on your sd card or on your PC. If your phone is ever wiped, lost, misplaced, taken by children to their underground lair, you would still have your saved data, if it is backed up to your PC.