External hard drive or NAS really depends on you and how you use your computer (i.e. if you've got a MacBook and use it sitting on the couch a NAS would likely be more convenient, if you mostly use your computer in the same place an external drive is cheaper and faster).
Personally, I'd recommend an external drive. Any of Other World Computing's external drives are fantastic, I've been using them for years. http://www.macsales.com/
You can either buy their pre-built ones, or you can buy an empty one and put your own drive in it.
Qnap or netgear readynas makes good raid products that are not so costly. Netgear readynas often have reduced prices. HP Storageworks is also a nice backupserver built on windows home server. Looking at your post history I would say you don't want to be cheap on your backup solution. Be economical and set up a home raid solution.