Jon's use of a secondary, removable hard drive is an excellent solution. With hard drives now down to unbelievably low prices, it is probably one of the least expensive routes. A 40gig hard drive can be found for about $75. You'll be able to backup about 70 gig, which should compress down to fit the 40gig drive. Data transfer rates between hard drives is extremely fast, so this would be, by far, the fastest backup solution for large amounts of data.
However, you must be willing to open your computer case and install/remove the hard drive everytime you make a backup image. If the backup hard drive is left connected, or in the case, it is susceptible to the same hazards as your primary hard drive. A severe voltage spike could arc throughout the entire circuitry and toast everything in the case.
Backing up an image of your system to a cdr is also a good choice, but it has limitations as well. For example, most users have c: drive contents that far exceed the 700 mb limit of CDR.
Of course, most backup and imaging software has a compression rate of about 40%, so you can get about 1gig of compressed and imaged data per CD. If you have 40 gig of data, you will need 40 cds to completely backup your system! A top quality CDRW burner will cost you about $100, and the blank cdrs are about 20 cents apiece. Writing to CDRW will cost more for the blanks, and take more than twice the amount of time to burn each disk.
Backing up to a ZIP drive does work, but likely will not be a cost effective solution, due to the number of zip disks you will need. You will be babysitting for a long time inserting and removing zip disks to back up a large amount of data. This is probably the slowest of backup methods.
You could install a DLT 80 gig tape drive, which would allow you to store all your data on one tape. This is the most expensive, and probably the safest backup strategy. However, prepare to spend at least $400 for a good drive, and $40 per tape. Tape backups can run without any intervention from the user other than inserting and removing a tape. Data transfer rates to tape can vary with each tape device, but generally they are reasonably fast. This solution is the business industry standard.
Everyone can make their own decision which way they want to backup their systems, but for me, the winner, based on safety, time, and $$$, is the spare hard drive system.
If anyone needs further info on backup strategy specifics, or hardware/software requirements, let me know.