I’ve had a Maxtor 500GB external Firewire drive that has been great. It came with Retrospect Express backup software — it’s not amazing but does the job. I’ve had some issues in the past when the drive gets full and have to manually clean it up and rebuild the backup index, which can take hours on a 500gb drive. That’s been the only con.
Maybe look into Amazon’s S3 service. Cheap, unlimited in size, and redundantly copies across the cloud (off-site backups in case of catastrophe – house burns down, etc). Prices for S3 are $0.15 per GB-Month of storage used and $0.10 per GB of data uploaded. I’m sure those prices will be coming down over time as space becomes cheaper and cheaper.
I’ve heard that Jungle Disk http://www.jungledisk.com/ does a good job of automatic/incremental backups to S3. It’s only $20 for the software, which is way cheaper than any physical hard drive you can find. And your space is essentially unlimited and can grow as you do.