I use Handy Backup, it provides both backup software and online backup services. It's the best and cheapest backup solution I ever used (handybackup.net).
I use Mozy for online backup and use their local backup option to an external hard drive. I have used both forms to restore files and it works great!
Now that is what I call prepared. You are right not to put all your stuff online, it is not as secure as many believe. No one mentioned Nortion Ghost here yet. It use to be the way not only to back up but to reclaim an image of an hard drive.
external hard drive.. saves time putting it all onto disk.. where as you can plug it straight in the usb transfer everything over in 5 mins and its done