personally i suggest picking up a cheap box at another hosting company, something lower end with a grip of storage. have your hosting co setup rsync so that it'll dump you data onto that server once day/week, whatever. also include 7 once/day dumps of your db's and have them sync to the remote server.
the bad part about backing up to your home is you have to get the data to the host if you should have a total drive loss, so you have to wait for that to upload which can take a LONG time. having it at another host makes the data transfer to the old machine, or even spawning a new machine at a different host, nice and fast.
and having it at a different host, preferably in a different city, means that if the Stay Puft Marshmallow man destroys the building your hosting company is in, you didn't lose your sites
i have hosting in seattle, atlanta, and jersey.