My solution is photo-centric. Here is what I did:
First I realized that storing photographs and backing up my home computer can be two different things for if I lost my OS and none of my precious photographs or documents then I could simply reinstall the operating system or move to a different computer with no loss of sanity.
My photographs are in two different locations. First I have a pro account at flickr.com where I currently have over 3000 photographs. If my neighborhood spontaniously exploded then I would still have my photographs.
Now we can finally arrive at my hard drive solution. I requires some hardware skills as you will have to build the final unit. I purchased a hard drive enclosure by Sans Digital. It cost under $50 dollars for the enclosure.
The enclosure takes Notebook size hard drive (2.5"). I purchased 120GB Western Digital Hard drive for under $90 dollars. The total cost was under $150
The enclosure fills many different needs. It connects through USB to any computer and shows up as a hard disk. So it is as if I had a hard disk in my computer or any computer I'm currently at. That is practical for me as I do image editing at work or at home or at my son's notebook or at my friends house ... you get the picture ;-)
The enclosure is small and lightweight - portable. It has an internal battery with a decent battery life. I can turn it on anywhere without the need for electric outlet. Best of all it recharges through the USB cable so taking it to foreign countries works great as I can plug it to any computer and charge it and don't need any power converter. I can carry it in my pocket. Besides being a hard drive it also has slots for Compact Flash Card or SD or SM cards. I use Compact Flash cards in my digital camera. I can plug my card into this
enclosure, turn it on and press the copy button. It automatically copies the entire CF card onto the hard drive. I can then erase my CF Card in my camera and continue shooting.
I have recently filled up one of them. It has pictures from many years, scanned photos or digital photos, retouched photos, RAW files. I also have sounds on it that I collect and important documents like installation files to CANON RAW software in case someone in the future needed access to RAW files and could not find compatible decoder.
After I maxed out on space I purchased another one of these enclosures and started the year 2007 with clean slate. If I need to print any of the older images I go to my drawer, take out the hard drive enclosure and plug it into my USB cable.
Be careful about backing up to CD's - they do deteriorate with age.
Here is a link to the hard drive enclosure:
http://www.newegg.com/Product/Product.asp?Item=N82E16822110001
Here is a link to the hard drive:
http://www.newegg.com/Product/Product.asp?Item=N82E16822136007
P.S. One warning - The enclosure can not handle partitions larger than 32GB so you have to split the 120GB drive into 4 partitions. They show up on your computer as 4 drives.