It would be nice to be able to backup the entire system (OS and all) everyday which is something we could do with huge-ass tapes.

If you really want to do that, I can tell you what filter specs to put into ArcServe so it'll ignore the stuff that's being read/written by the OS "live" that would produce errors at backup time. But honestly, I wouldn't bother. I just assume that if the OS drive goes down I'll have to reinstall the OS anyway. I only back up the irreplaceable data, not the OS and stuff I can reinstall. But to each his own.