There are so many options when it comes to data backup.
First you need to answer a few questions:
1. How much data do I need to backup? - If it's less than 7GB, you can use Microsoft's
SkyDrive to backup to their cloud for free. Samus' suggestion about zipping and password protecting your data is a great idea too!
2. How many computers need to be backed up? - Just yours, you and your wife/gf? Etc.
3. Does this data need to be portable, or can it be stationary? - If it needs to be portable, for business travelers for example, then perhaps a smaller 2.5" external
USB drive would suffice.
If it can be stationary, then you need to ask if you want a local backup device, or if a
Network Attached Storage (NAS - note for the unit I linked, you will need to buy two internal 3.5" HDDs) unit may come in handy if you answered 2 or more to question 2.
3. Do I know the difference between a backup and an archive? - An archive is a single storage device. Like, on your computer's hard drive. A true data backup is one where the data is stored on two or more storage devices. A basic example is having data saved on a computer
AND an external USB hard drive. If you have your data saved just to an external usb drive, then it has a single point of failure, it is
NOT A BACKUP, IT'S An Archive.
4. Do I need a RAID (Redundant Array Of Independent/Inexpensive Disks) device? - That depends, RAID devices to provide a hedge against hard drive failures, but they aren't an end-all solution. Why? Because something could happen to the unit that houses the drives that causes all the drives in the array to fail at the same time. Sad Panda

RAID is only an viable option if you can have a stationary backup scheme.
RAID has many options/modes for data storage. RAID 0 is for speed (usually videographers use this option) and the drives inside are treated as one large volume as the data gets written to both drives at the same time. So if I had a unit with Two 500GB drives, my computer would see just a single 1TB drive.
RAID 1 is a popular option for data storage as it 'mirrors' both drives, so what gets written to the first drive, also gets written to the second one. If I had a unit with two 500GB drives, my computer would see a single 500GB volume.
The most popular RAID option is probably RAID 5 and this is mostly used in businesses with 3+ drives. Let's say I have a unit with 4 500GB HDDs. In a RAID 5 setup, I will see an overall capacity of 1.5TB. As one drive's worth of storage space is used for redundancy. Redundancy is a mathmatical equation (simple algebra really) that if one hard drive fails and you reinsert an identical, working replacement into the unit, it can rebuild the data back to just before the drive failed.
Here's a basic example formula, 1+2+3=6. Let's say the hard drive with the value of 1 failed, we are left with X+2+3=6. It's obvious that 2+3=5, so X must = 1. That's what the RAID controller is calculating when it's rebuilding the array. But you must keep in mind that even this scenario isn't fool proof and the data should be on another unit because two drives may fail at the same time, and the unit won't be able to rebuild the array. Or, like the other RAID units, the enclosure may malfunction somehow, causing all the drives to fail.
At home, I have a RAID 1 unit with an identical 3rd spare. I manually backup whatever I need, when I need it to both the RAID and the spare. I used to make an image of my computer and save it to a NAS RAID unit, but I only needed to use it once in 4 years so I stopped. Now I just backup important files like pictures, etc. when needed, which is only once or twice a month and it takes 2 mins.
As for backing up the PS3, just get a cheap-0 8GB USB stick and copy your game saves over. The rest of the stuff can be re-downloaded. I'd also recommend copying the contents of the USB stick to your computer/backup unit in case the USB stick decides to give up the ghost.
Hope that helps!
Jerome