This months PC World has a look at a handful of external backup devices... Theres one there from Western Digital with 500GB for less than 7000... Thats very good VFM... You can also get an internal hard disk and put it in an external casing, but the cost will work out the same almost in the higher capacity ranges such as 500GB... If you want less capacity, choose internal HD with external casing as it will be cheaper...
Arun