I know you're using a drive for backup, but I'd also recommend using an online backup service like Mozy or Carbonite. Even with a backup drive you're still prone to damage and theft. I recently upgraded to Mozy Unlimited from the free account I've been using for a couple years (to back up important documents and financial stuff). I can't tell you how much of a relief it is to know that my wedding videos and photos are also outside my home (encrypted before they left).

I've gone through the restore process for one of my clients with Mozy. I had recommended it to him, and he was extremely happy he had it when a pipe burst and drenched/destroyed the laptop sitting underneath it (including the hard drive).

On a separate note, I recently jumped on a Newegg deal for a 2TB Samsung external drive (getting rid of stock, I assume). I love having all the space, but I wouldn't keep any important data on it or I'd add it to my Mozy backup. I use it exclusively as a media drive. I do love having the space, though! Price was the only factor for me, as I didn't care how fast or even how reliable the drive was, so I definitely grabbed the $99 2TB drive.

*edit*
However, I'm transferring about 23GB of files to that drive, and getting an average of about 37MBps, so it's not too slow.