I do something similar to this. Redundancy is the key.
Disk space is cheap & online storage for photos is cheap. I never delete a single photo.
1) 1 copy on my own PC. I may have gigs and gigs of photos, but I also have gigs and gigs of free space on my local system.
2) 1 local copy on a NAS that automatically syncs over every night.
3) 1 online copy using mozy - its like $5 / month. Again - the syncing happens automatically within hours of the original photos being placed on my home PC.
4) 1 copy on DVD in a safety deposit box. This is the only non-automated portion of my backup routine. Every couple of months I backup up all my photos, bring them to my bank where I have a safety deposit box and swap out the old copies. I was paying for a box anyways (although I needed to upgrade to a slightly larger one to hold the DVDs).
Ultimately, photos rank up there among the most important things in my life. I would be devastated to loose some of them. Redundancy is your friend. I may spend a few dollars a month doing this, but I am pretty sure that unless my house burns down on the same day that there is a worldwide financial crisis causing mozy and my bank to shut their doors, I should be ok.