I've been testing an interesting approach to backup. I'm using a repository/version control system, most commonly used by programmers. I'm using Subversion with Tortoise, both are open-source and free.
I have my working copy of the project on one disk and the repository on another, and I burn backups about once a month (my comp is not connected to the internet, which does wonders for stability ).
A repository is basically a storage from which you check files in and out. It only stores the changes or differences between old and new versions, so it doesn't eat too much disk space. The nice thing about it is that each time you check in a file you can add a comment to that version, so that if you later want to go back, you know what you've done with each version. It also means that I'm not storing multiple copies/versions of the same file in my working copy, so the file structure there remains very clean. All the versions are stored in the repository.
It's a bit of extra manual work, as I need to check in files I've changed and comment them, but I think it can be worth it in the long run. If you have multiple people working on the same project, Subversion would be a great way to organize the files.
Ragnar
p.s. Subversion is a command line tool and cross platform, while Tortoise is a graphic interface that I believe is only available on Windows. If you're not freaked out by a command line interface, Subversion works fine without Tortoise too.