Here's our backup strategy.
We have DVD Burners in our computers. We don't use backup software or anything like that, I copy the important stuff to DVD - the stuff that's active now - and burn the DVD. On a weekly basis, I copy ALL the files to an external 200GB Hard Drive which lives in the shed normally. I make CD's of specific folders as well - especially the family photos and I keep those outdoors in an ammo box that's nowhere near the house.
All data storage systems fail...or go obsolete. When you migrate to a new storage system (like I did from Zip Drives to CD then from CD to DVD) you have to go through a migration process to bring your files with you. Most of the time reading an old FILE isn't the hard part - it's reading the old MEDIA that's the problem.
And, of course, if it's REALLY important, print it on paper. Nothing better.
I also have a 1GB keychain drive that I use to carry critical programs - I have a copy of OpenOffice that runs off a keychain drive -that can be critical to recovering your files on another computer.