I bought a Western Digital 1TB MyBook pretty cheap. USB only, but thats all I need. Formatted it, and plugged it into my Airport extreme base station. It now keeps 3 Macs backed up, plus one of the Macs external HD's.
Not had to use it to recover anything as yet, and hopefully I never will. Still, it's all working nice and smoothly
I have a 1TB external USB drive that I use for both Time Machine and backing up my Garage Band working files & iTunes music. It's not super fast, but sure is handy.
I partitioned my 500 GB external into two equal parts too. However, I did use it once to see if I could restore my iTunes collection before I moved it to another drive (just in case it messed up while transferring over). I haven't used it since.