Backstory is a tricky thing. It's hard to balance and its hard to be creative in getting that information in there. Backstory is oftentimes more useful for the writer, than the reader and oftentimes can and should be chopped up into little pieces and spread throughout the document.
Backstory is important because it explains things. It explains why your character is such a moody person. It explains why she killed Joe and not Susy. It explains why she ends up taking up that chance to go on the journey that we led her on.
The most important thing to remember with backstory is that the reader has to want to know this stuff. And that usually doesn't happen on page three when we are getting to know the main character. There are exceptions, as with everything, but remember as the newbee writer we have the burden of proof on our shoulders that we can write and write to knock the socks of our readers.
Backstory is information readers obtain on a need to know basis. I'll tell you, but I have to kill you. I don't even remember who originally came up with that line.
I like to think of backstory and/or flashback as driving forward while looking at the rear-view mirror. You can't really keep your eyes focused there because you'll probably end up as road kill.
Backstory should be regurgitated in short spurts and not spewed.
Any others I may have missed?