I use a 40GB FireWire drive to back up my Macs. rsync-hfs keeps a copy of whatever's currently on the important parts of my hard drives. I don't do incremental backups or use tape; that's too much work, and having a reasonably current spare is sufficient for the moment.
I'm thinking about backing up everything (not just $HOME and other such bits), and doing incrementals. The 120GB FireWire drives are reasonably cheap. I could get one, but the 250GB FireWire drives are out there. In a few months they should be hovering around $150, roughly where the 120GB FireWire drives are today.
Think about it - .25TB as an impulse purchase just for backups and stuff. My first hard drive was 45MB, about $450, and it was spacious enough that it took me a couple of years to fill it up (about the time it died due to stiction problems). A few years ago, 36GB of online storage for a test server was a big deal.
What a long, strange trip it's been...