I've lost important (well, sentimentally important) data far too often.
A few years ago I was running the family business (a small copy shop, also selling stationery and doing light PC repair) and had all my personal data on a 60Gb drive. One morning it failed - you can always tell the sound - so I dug around and found another 60Gb to rescue it on to.
The PC spent the rest of the day chugging away at the failed drive and got almost all of my data back.
The next day the drive I'd rescued the data onto failed. I dug around and I had another 60Gb drive, so I did the same again.
On the third day, the third drive failed. I yanked it out of the PC and threw it in a pile with the other two - only then did I notice they were identical IBM drives. On closer inspection, they had consecutive serial numbers.
I don't really back up any more. I try keep my data on my always-on NAS box (I've learny my lesson there, if it doesn't power down don't turn it off at the wall), and if it's important I'll leave it on my PC/laptop too.
To answer your question, cr0sh, cloud storage is the way to go. It should be backed up at least daily, and if there's any hardware failure you shouldn't ever notice.
Microsoft provide 25Gb attached to a hotmail account (called Skydrive) - though I believe it's limited to 50MB max filesize - for free, and there are commercial solutions. Edit:
USB drives, in my experience, have a higher failure rate than internal drives. I think it's something about cheap caddies not powering them down properly.
FreeNAS is good but you have to remember the extra ongoing cost of running a whole machine vs. the initial cost of buying a low power ethernet drive caddy.
I have a QNAP NAS box and it's amazing. I have a 1TB drive in it, and it does bittorrent, newsgroups, webserver, ftp server all in a box not all that much bigger than a hard drive and with a power consuption of about 15W. My only trouble with it is that 1TB doesn't take long to fill when you've got a 50mbps connection