Hi ericrollo,
It really depends on how important your data is and how often it changes, and how long you intend to keep the data for.
A back up should really be off the machine you're backing up from, and if you can, onto media that you can store for archiving in a different location, such in the garage or at a family members house.
For example, if you have a house fire, then your PC may be damaged, and any other RAID system you have setup or network/attached storage could be damaged also, along with any archived DVDs. You archives from a family members house will be intact. An alternative might be online backup system if you're needing this kind of protection.
If you're just wanting a more of a less downtime option, then raid or mirroring is a nice option as you can usually rebuild a drive if one dies... but as you suggest ideas about external system or home server I assume you want to protect your data more then keeping a system running.
Windows home server provide a way to do system restores and backup all your important files in a central location, so it might be worth looking into if you want a nice easy all in one solution, combine that with Microsoft's skydrive offering and you have 25GB of online backup for your pictures, music and documents.
Another way, and this is what I prefer, is to use DVDr. Just buy some really cheap media, 50 tub and do a backup once a week. That'll give you 4.5gb or there about space for your 'most important' files. For less then £10 you have a good archive that you can go back the entire year and store away from a computer.
I mainly backup my pictures and app development files. I also sync my documents to Skydrive and everything else to a 1TB USB external drive.
Give us an idea of what you want from your backup and we might beable to narrow down your backup solution for you
