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Main storage: Network Attached Storage (NAS) with a 3TB RAID3 array made up of 5 x 750GB drives. One drive failure can be tolerated without losing any data, and I have a spare drive available for immediate replacement (an extra $150 is worth it for peace of mind...)
Backup storage: 2 x 1TB drives in a removable caddy, one stored here, one at my mum's place. They are swapped & updated regularly.
Tip: if you have more than one external backup drive, try to use different brands and/or models to protect against a fatal flaw in firmware or hardware (eg dodgy power supply) possibly taking out both of your drives at the same time. Keep them disconnected when not in use (including USB/firewire/network cables) to avoid a power surge instantly killing everything.
Remote storage is becoming more popular, although it's still quite limited for a "consumer" - these days a few gigs of data storage isn't going to be enough to keep all of your important pics and docs, but paying for a commercial service is going to cost big bickies. For the moment, an extra HD and sneakernet to an alternate location is probably the best bang for your buck.
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