As far as backup solutions get an external drive 2X your current size. You can assemble one yourself for less than $100. Go for size, not speed.
For backups, if you're using NT Backup, go the extra mile and use ASR (Automated System Recovery), which also creates a floppy you can boot to for 100% restoration, not restoring from a working install as NT Backup does. Note you may have to uncheck the "use wizard" to get to ASR option, but it's a more civilized option.
One drawback to both these options is a proprietary file format. In other words, you cant "look into" an NT backup file. I also am a big fan of an app called SyncBackSE as it is a file copy/sync program. It creates files that are duplicates of your originals and checks for changes and updates daily or whenever you schedule. This way your files exist in two places, you can grab the drive and know you have all your files in a readable format.
On my server, I do NT Backup daily, ASR weekly, along with a daily file-copy by SyncBackSE. If the server fails I can put the backup drive on the network and people can still work. I swap harddrives weekly, one is with me at all times.
On my home network, I use SyncBack and a ginormous HDD. The external drive stays connected but SWITCHED OFF so no "oopsies" like erroneously formatting etc. It also reduces wear on the drive. I turn on the HDD and run SyncBack as needed, usually one or twice a month, or whenever I dump digital images. I am also running RAID 1 on my PC for extra fault tolerance, and it has saved me more than once.
Now that you have had a data loss scare (we all have had that happen, except for the liars) I am refreshed to see someone asking for how to prevent it in the future. I liken it to falling asleep while driving...if you are lucky you get a pass the first time but if it happens again you deserve whatever happens.
Tony