With the advent of 2TB drives, you could easily combine 3 of these with software RAID 5 as you suggested. Depending on how long you need to keep the data, recording them to dual-layer blu-ray disks might be a better solution. Ya, it's a lot of disks (you can buy 100GB discs now), but they'll last longer and you don't have to worry so much about mechanical failure or needing a certain OS when you want to restore them.

The cheapest way I can think of was exactly what I did:
Cheap PC case with plenty of drive slots and FreeNAS (www.freenas.org) Been working great!