So this is normal?  Should I upgrade the client?  I just don't want to eventually end up with 1000 addresses...

EDIT : Nevermind.  I see your client is for linux... like I said in the OP, I'm running Win7

It is windows as well as linux, but it is not integrated into the mainline yet. It is still a work in progress.

What I did was competely remove the "default address" functionality, as it doesn't really do anything beyond confuse users. It now simply shows you a list of addresses on which you can receive coins.

It's not an issue, per se. Bitcoin tries to keep a pool of 100 addresses in reserve for your future use. Whenever one address receives coins, a new one is displayed. This is so that, by default, people will use new addresses for every transaction, and only reuse addresses when absolutely necessary.

Now, the UI for address handling needs a LOT of improvement. But the basic functionality probably isn't going to change; using new addresses helps keep you safe, not to mention helps you determine who you got coins from. Or at least that's the idea. There have been detailed discussions of this in the past, though I don't have them at hand. You might find them from a search.

I've also found that people don't understand how transactions work:

All address must use their balances in full.  So, if you have one address with 0.5 BTC and another with 0.6 BTC and you send 1.0 BTC to someone then there is 0.1 BTC "change".  Since the inputs have to be used in full, the client will automatically create a new address and send the 0.1 BTC to that address.

When you look at the transaction in Block Explorer, you'll see 2 inputs (the 0.5 BTC and the 0.6 BTC addresses) and two outputs (the recipient of the 1.0 BTC, and a newly created address in your wallet.dat to receive the 0.1 BTC).

So, it looks like Bitcoin is just creating addresses constantly for no reason.  The reality is that it's part of the protocol.

Can someone tell me how to back my wallet up please?

I never understood why this is encouraged.

Yes.

From:  https://en.bitcoin.it/wiki/Transactions