A DL disc can hold over 8GB. I like Verbatim, but most brands should work fine.
You can see all the formats you can burn by going to Menu > About this Mac..., then click More Info..., then System Details (in Lion) or just More Info in SL. Then, select Disk Burning from the list on the left. Capacity will be shown when a disc is loaded.
If you burn the discs from the Finder, they will automatically be formatted as hybrids - both HFS+ and ISO-9660. You can setup the same in Toast.
Hard drives "last longer" and are a lot safer than DVD:s, but should an accident happen you lose everything instead of only one part of your backup.
If you're happy having a hundred DVD's lying around to minimize the risk of losing everything at once, that's fine. But I'd rather just get two hard drives and have a double backup...
You could always encrypt them into an image file or something if you're paranoid of it getting stolen, throw it onto an external drive then lock the drive somewhere safe in your house or something.