Well, raid can definitely help, depending on the setup. However, it is a pricey alternative and most people on dedicated servers can't afford it. Backing up to your home pc or paying your hosting company $10-25 per month to do it is still cheaper then a proper raid setup.
Warchild - if I was in your shoes, I'd still have a local copy of my sites. I don't care how kickass a host is, shit happens. Airplanes flying into buildings and shit can really fuck up a backup plan
Not saying that having your host backup your shit is a bad idea... actually I'd say it's a pretty smart idea. Having a backup of your shit at the datacenter makes recovery a helluva lot faster then uploading from your home connection.