backup - fixed

--Get arguments
tArgs = {...}
local files = {} -- initalize "files" as a table

local function backup(dir)
  for fileNumber, fileName in ipairs(fs.list(dir)) do
    print("Backing up file "..fileNumber.." with name "..fileName)
    local myHandle = fs.open(fs.combine(dir, fileName), "r")
    local myData = myHandle.readAll()
    table.insert(files, myData) -- note the lack of quotes
    myHandle.close()
    local string_toSend = textutils.serialize(files) -- never, ever name your variables "string" or "table".
    local servConfig = fs.open("system/serversettings", "r") -- fixed the mode for you
    local servID = tonumber(servConfig.readAll())
    servConfig.close()
    rednet.send(servID, string_toSend)
  end
end

if #tArgs < 1 or #tArgs > 1 then
  print("Usage: backup <directory>")
  print("Usage: backup all")
end
if tArgs[1] == "test" then
  backup("system")
end