after working in networking for nearly a decade i simply have no faith in hard drives. anyone who works a lot with computers will regard hard drives as temporary storage at best. theyre the most primitive, mechanical component in your computer and are just a ticking time bomb. you can extend their lifespan a bit by ensuring they have proper cooling, but it is just a matter of time until they fail.

i actually have a friend who backs up and stores everything on cheap huge hard drives, and nothing i say to him gets through. its just a disaster waiting to happen.

i find i actually need about 80 gigs of space for my OS, programs, work in progress, any games i am currently playing, etc. anything OVER that is stuff slated for backing up anyway, and gets burned to DVDs which are stored in a cool, dark place.
so whether i have a 100 gig HDD, or a 500 gig HDD, the only difference it makes is in how often i have to stop and burn DVDs to clear it off. since this is done more frequently with a smaller HDD, IMO it is 'safer' than waiting months to fill up a 500 gig HDD before you back up.

currently on my work machine i have two 320GB SATA Seagate Barracudas in RAID-1 (mirrored). i keep all of my work in progress in a WIP folder that is also mirrored onto a USB flash drive (so i can take my work with me), and gets burned onto a DVD when it reaches ~4 gigs. yes, i am a bit paranoid :)