I like the way you think about the various levels of backups. It sounds like you have a good handle on how to address the various types of failures that can occur.

I started with on-line backups at home because I realized I wasn't diligent enough about getting dvds burned and off site. So, for me, on-line backups are a way to address a failure in human nature.

Ideally, I also have a backup elsewhere on my home network, and I now have a pair of usb drives that I keep one off site. But, I could go weeks before I get my latest files off site.

For me, I'm protecting my pictures. Nothing else on my home computer is important (well, maybe my wife would have an opinion there!) I'd hate to lose all my vacation photos just because I didn't get them backed up soon enough.