Whatever you do make sure you have stored your important stuff on more than one hard drive. Should one fail you've always got an extra. Personally I have thousands of pictures that would be a great loss to me if that were to happen. I have them backed up on three different drives. And all my music and videos on two drives. And Everything I can think if is backed up on my 400GB external. I especially like the idea of the external because i can take it with me, Should a fire or other disaster ever happen I can unplug it and be gone in seconds, And even store it in a safe depost box.

Costco has a few externals from maxtor,seagate and WD, All pretty reasonable prices. Of course you can also find plenty of good deals online.