We tried using NTBackup with task manager but we found it unreliable unless you spent the time to make a really good script. We just shelled out the money for a program like Backup Exec. If you like Open Source, or do not want to spend the money, you can use AMANDA on a Linux box(which is free).
For the hardware, we used external hard drives a long time ago but found them to be unreliable. Many people use external drives because they have "lots of space". However, if a drive went bad, then all the backups on that drive would be lost. In addition, external drives are limited if you want to keep your backups for a long period of time(it does not make sense to keep buying drives).
We also ran into problems when changing the drives when they filled up. There were many occasions where we had to reboot the server for the new drive to be recognized(not good at all).
We bought a DAT drive and now we can keep the DAT tapes as long as we want(or reuse them). If one tape failed are hundreds more we can restore from. DAT tapes are not proprietary like Sony or Exabyte tape/drives so many companies make them, thus relatively cheap.
Which ever solution you choose, make sure you use full and incremental backups to save space and ALWAYS test the backups!!!!
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