For backup, I use three HD's and rotate them:
1-Caddy (unposered) - will be used on next backup, then moved off-site.
2-Closet - will be moved to caddy after next backup
3-OFFSITE (locked in my desk at work) - this is the most recent back up, and will be moved to closet after next backup.
After a backup, the rotation looks like this:
1 goes to 3
2 goes to 1
3 goes to 2