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Two External HDs
I backup all my data files onto two external HDs and keep a recent image of my OS, Vista (spit, spit) on one of the externals.
I use SyncBack to do the differential backups.
Offsite, I encrypt my most important files and store them on AWS, Amazon's Simple Storage services - less than $1/month.
When I have the time and money, I will backup to a Drobro and keep an external HD at my parents' place.
I have two external backups of my Mac (music, video) as well. No offsite - have to figure a way to do that. Buy yet another HD probably.
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