I've just bought a 1.5TB hard drive for £66, which works out as 5p per GB (drive is 1.36TB formatted), which is only slightly more expensive than the Verbatim DVDs I use for backup which are 20p ea (for 4.7GB) in 100 packs. The MTBF for hard drives is over 50000 hours while powered up, so if the drive is stored turned off, the main long term problem is compatibility with future hardware… oh, and drives are less drop-resistant!

edit: you don't even need an enclosure – I have a USB doofer which plugs straight into the bare drive