I rotate two external drives between my desktop and my safe-deposit box.
I am still learning how do use a computer, and I don’t mind admitting that I don’t know much, so here goes.
I have a 120 gig hard drive and am running XP. How would I go about doing a full system backup on DVD or an external hard drive? How do you get the data on there and how do you get it back onto your internal hard drive if you for some reason have to wipe it all clean? Will the backup contain all of your programs and drivers for your devices or will you have to go through doing all of your updates again?
See, I told you I don’t know much!
I worked for a while with a grad student who had backups of her doctoral thesis at work, at her boyfriend’s apartment, at her boyfriend’s lab, and an extra copy at home on floppies she kept in the freezer, because she’d heard freezers are safe places in the event of fire. Whether that’s true or not I don’t know, though I suspect not.
As I mentioned, I’d be (somewhat) screwed. While my extensive, uh, art collection at home would likely be lost, I like to back up my most important documents to a DVD every now and again. The CD wallet in my car isn’t full, and provides a convenient, remote location to store my data.
At that point, I invoke Q.E.D.'s contribution. If my car blows up and my house simultaneously burns down, I’ve got bigger problems. 
Dual hard drives, one in a ‘mobile’ tray. cheapest, fastest, total backup, easy.
YMMV
Likewise, I’ve got an 80 gig USB HD plugged into the computer with all the backup data on it sitting on top of the desk just waiting to be ripped out of the plug in case of emergency. I suppose I should back that up also and have the disks here at work too…