Our neck of the woods is about to be dragged kicking and screaming into the late 90's as we get DSL. At that time, I'll look at an on line backup service.
Right now, I have a 2G disk that uses the Apple "time machine" stuff, as well as a physically separate drive on my MAC that I copy select things to. I also have a USB drive that gets a selective copy, and on occasion I either RTP or Samba stuff over to the Unix box.
So the Time Machine stuff protects me from myself in the short time (minutes). Time Machine, the USB drive, the Unix box and the separate drive protect against drive failure.
What's missing in this picture is off site storage. I have on occasion cut DVDs with data on them, but it's not frequently enough. So once I have some speed > 600K bps, I'll use an online service (probably carbonite). While I hate yet another entity pulling money out of my wallet as the ones and zeros fly, I'd hate loosing everything I'd work on in a 3-6 month period if the place burned down. At that time, I'll check out the trial offer. I need to limit the backup to certain data, not everything on the machine. Even just backing up the separate drive would be fine, as I would still copy things that I wanted to _really_ save.
Right now, I've got about 110 GB of stuff that needs saving. I have about 400 GB on the machine, which has 2.2G of disk on it. The Time Machine has 2G on it, it backs up this machine and some others. The Unix box has a 1.5G on it. And a decade ago a gigabyte seemed so big...
Any automated backup system is a big win. The on line ones are a great idea.
I haven't used online backup; but I think there is a market for the service now that broadband access is more common.
However; one has to keep the following things in mind when entrusting your backup data to a third party. Privacy from prying eyes, both internal and external (hackers). Reliability. How long does it take to backup data. Can you customize the backup routine to suit your needs? How quick can you retrieve something you lost on your hard drive? Subscription costs. What happens if the company gets bought, sold, or goes tits up?
I use a Synology DS211j DiskStation with 2TB of RAID 1 capacity as my backup solution for my desktop and the wife's laptop. I use the native NTBACKUP on my XP box, and Win 7's native backup on my wife's laptop. I like the old NTBACKUP better as I can customize it better to my liking.
The downside to my system is potential fire or theft of the drive unit. Although I can easily disconnect the external drive and put it in a safe or safe deposit box. The DiskStation is treated as a NAS (Network Attached Storage) server on my network.