One popular take on this subject is the 321 backup philosophy. 3 copies of your data - on 2 different types of media - with 1 existing off-site. Simple and effective.
We use the Mozy online backup service. For home use, it's only $5/month. That's cheap insurance and peace of mind. The current Mozy client supports encryption - both in transfer and on their servers, as well as duplication of your online backup to a local external hard drive. Let's break down how this fits the 321 philosophy:
3 copies of your data: You've got one on your C:, one on Mozy's servers, and one on your external hard drive.
2 types of media: You've got copies of your data on locally accessible hard drives, plus another copy on redundant arrays at Mozy's facilities.
1 copy off-site: Again, Mozy's storage facilities. If your home or office experienced flooding or fire, you've already got an up-to-date copy of your data elsewhere.
If you would like to sign up for a home account, visit www.mozy.com. If you need a business account, we are a licensed reseller and can help you monitor and facilitate your data recovery in the event of a failure. Call or email us for more information.