Looking into backup solutions - storage

We have a little USB kit which converts a laptop hard drive to an external storage device. It's been handy, but we only have a 4GB hard drive in it, so it's limited.

I'd like to get a drive that's about 80GB so we could back up both computers' data on it and keep it somewhere (disconnected). I've been tossing around various other storage ideas and learned some kind of cool stuff.

There's a USB kit for regular 3.5" hard drives at eBay: http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=3038040089&category=44994

What's nice is, it's USB 2.0 instead of 1.0, which makes a big difference in speed.

USB 1.0 tranfers data at 12 megabits per second
USB 2.0 transfers data at 480 megabits per second
...That's even faster than firewire, which transfers at 400 megabits per second.

Thing is, you can get the self-contained, external hard drives for pretty cheap now, so it might be better to just get an external drive rather than an internal drive plus an external kit.

However, if we got the external kit, we could get a couple of hard drives and swap between them for incremental backups.

Anyone bought either of these solutions recently? What's your experience been? I'm just tossing some ideas around and trying to figure out the best option. I just know backing up to CD's is not my favorite solution - it is so time consuming I tend to put it off, and that's NOT GOOD!