In addition to .mac, there are other online backup services that give you much greater space. I use Mozy, which is in beta for the Mac but has worked so far for me. I have over 400 GB backed up on Mozy.
I'm sort of a backup fanatic. I have 2 main drives, System and Media. Both are backed up using SuperDuper to hard drives #3 and #4. I also use Mozy. And once a month I do an incremental backup of photos and video to DVDs and keep that stored at work.
With an iMac, an external drive cloned using SuperDuper or one of the other programs the others have mentioned would work well. And, for really important stuff, consider an online backup too, .Mac or something else depending on how much data you have.
Yes, it would be... and they are reasonable these days.
I have a LaCie and while there are fans and critics, I've never had a problem. Usually it is a matter of personal preferences and past personal history.
Just remember, a backup plan only works if you actually back up