I am paranoid about losing data - particularly with family photographs. It would kill me if I lost photos of my young son. I have photos stored on a 500GB internal drive, videos stored on a 1TB internal drive. I backup the photos to a 500GB external drive, the videos to a 1TB external drive and I store my music on a 500GB external hard drive which I backup to another 500GB drive. All my user files are backed up via Crashplan online. Additionally, I use Crashplan to send important user files to my laptop as a final line of defence......oh, and I have a 2TB drive which I update every 6 months or so which I keep in my garage.
I think I'm a bit OTT, but with the relatively low cost of storage I thought better to be safe than sorry. :-)