1. USB is simply too slow for transferring large amounts of data. Check into adding either FireWire 800 or an eSATA port.
2. Look into a RAID 1 system to add an automatic/redundant system.
3. Buy larger than you think you need, but shoot one below the largest available. Seagate released a 1.5TB drive recently, and it sells for under $180 each. Once they hammer out the reliability issues they will be a viable option, and getting a 3TB external system will be obtainable for cheap.
4. Consider using a combination of a single, large internal drive for back-up along with an external system you can move/hide. As someone else said, if you’re home is broken into you’ll have everything in one convenient place to steal, thus losing it all forever.