I finally bit the bullet and purchased a NAS and norton ghost. I bought ghost just in time, because I had a series of loosely related hardware problems that were very difficult to track down, and ended up restoring from the backups about 8 times. The computer was an old one that I had upgraded part by part over several years, and more than one part started failing, corrupting the OS each time. That sucked.
At first I just had norton ghost backing up to an external USB hard drive. That was a 500GB drive in a cheapo aluminum external chassis. That worked ok, but I wanted something more robust and that required less user intervention since I didn't want my backup drive actually hooked up to the computer I was backing up, and I didn't want the USB drive running all the time either. So I got the NAS box, 4 500GB drives in a RAID array plugged into my LAN. It's not the fastest solution in the world (about as fast as a USB drive actually) but it works fine and is pretty reliable.
As said before, the true test is a backup/restore cycle. The only way to really do that without risking all your data is to buy a second blank hard drive, back up your computer, swap the main drive out for the new empty drive, and try to restore it. If it works, you win. If not, just swap the drives back and try again.