1)-Having both DVD's & CD's, which is better to back up on. (I know the DVD will hold more pics)
DVD's. They hold more. There's nothing really wrong with CD's, but they don't have any advantages I can think of. If you tend to use 512 meg cards and don't shoot very often, they are probably OK. For most people, it's cheaper and easier to just use DVDs.
2)-once you back up pics, do you delete them from your hard drive to make room. I have 1000's of pic on my computer but would like to clear my system once they are backed up. Is this wise?
Why? If they are slowing down your machine, you should organize them in a way where that doesn't happen. If you are running out of space, that's another story. You either have to make more space or something has to go.
I use computers for a living and think they are really cool, but I don't trust them. Try not to rely on having one copy of any picture because you never know when that copy will go over to the dark side. Copy them to DVD even if you do leave them on your machine. If you are taking them off your machine, copy them to two DVDs in case one of them goes bad on you.
My recommendation is that you back up all of your images to multiple DVDs and store one offsite (at your office, friends house, Fort Knox, whatever). Once you copy them from your camera to your computer, don't erase them from your camera until you've made copies onto two physically different devices (a second hard drive or a DVD).
If you're doing 100 gigs, you may want to investigate external hard drives. That way, you can keep the pictures on your computer and do a full backup whenever you want to.
If you really want to get fancy, get a RAID NAS instead of an external hard drive. You can set it up so that any computer on your network can access it. It can also be set up with several hard drives and if any one of them fails, you don't lose anything. It's not a very cheap option, but it's pretty easy and very effective. Even with the redundant hard drives, it's still not good enough as a single backup. You could accidentally overwrite your files, get flooded, hit by lightning, robbed, or get smacked by space debris. You just never know.