Question for Server People (SBS)

There is no reason not to use an external back HD. It is a good idea. Since restores can be nearly instantaneous. But remember IDE drives are cheap for a reason. They are not as reliable as SCSI drives, don't last as long, are more difficult to recover data from, etc. But for an occasional backup they are great.
Other things to consider. a HD would not allow for incremental backups (due to disk space). It also would not allow for archival backup (since you would only be keeping a single backup image).
If you go with HD's, get several of them and rotate which one you are writing too.
For example, if you do weekly backups (the minimum at most places) get at least 4 HD's since this would protect you a little from IDE disk failure, and would also allow for at least 4 week old files. Also occasionally (say once per quarter) take one of the disks offline and label and put it in a off site fire safe.
Tapes are the best over all backup device, but they can be a pain in the rear. For small backups CD-R's are good. For slightly larger DVD-r's are good. The thing to remember with any backup is that they do not last forever. This is especially true for cheap tapes (low quality) and for CD/DVD backups (unless they are stored in an oxygen free environment).

With disk space being so inexpensive these days, you may want to consider just setting up a mirror. Then if one disk dies you've still got the 2nd to hold you over until you can schedule maintainance. Mirrors will pay a penalty on writes, since the data needs to be written twice, but will pick up on reads. I think raid5 is overkill unless you've specific needs that require such. Raid5 carries a performance hit on writes as well since it needs to calculate the parity block.

Tapes are expensive and lots slower, so just take monthly backup and stash on HD on another machine unless your disaster recovery plan mandates the need to store data offsite. CR-RW can be utilized as well and has longer term storage (magnetic tapes demag over time), but can become cumbersome if you need to back up lots of data.

A bit off toic here, but maybe elaborate some on your requirements would help

A couple of corrections:
Raid 5 SCSI does not carry a write penalty. The opposite is true. It writes faster then single disk operations. Remember SCSI does not need CPU overhead to manage the writes, each drive must only write a portion of the data and all writes happen at the same time. SCSI supports a host of features which make it very well suited to RAID operations, even without a raid-array controller.

Tapes are not expensive, tape drives are. For a 300gb operation, I'm sure he is using DLT's which are very expensive to buy. But unlike most alternatives, last a very long time and the cost per backup is low and allows for a powerful mix of full and incremental backups. But they are comparitively slow (in comparison to his idea for a external HD(s)).
CD-RW does NOT have longer term storage. They degrade much faster then tapes do. Also CD-RW is less stable then CD-R.
Tapes do not typically degrade unless exposed to radiation or sunlight. But CD-R's aren't too good there either.

I was suggesting cost effective solution that has worked out well for me in certain situations. Last time I looked, you could buy about 10-20 ATA HD's for the price of one DLT, and tapes ran on the order of 80-90 bucks apiece. I have fairly bit of experiecne managing servers in large multi-national data center environments and can assure you that DLT's also fail all too frequently.

SCSI=good, but margin of avantage seems to be shrinking for small server market. I prefer them myself, and use in majortiy of my appllicatons, including desktops. Once you get used to wickedly fast concurrent read/writes, you get spoiled in a hurry;-)

I suggest the comments about RAID5 write speed may depend upon factors such as stripe size, file size, and the amount of ram on your controller, no??

Always hated dealing with optical jukeboxes, but was told the reason for deployment was the longevity factor. Obviously you "fix" the disk once full.

Don't you think something like mirrored drives backed up by second machine would be cost effective solution? You can still use whatever backup software youprefer to configure full, incremental, whatever....

But maybe it would help if we knew what this server was actually going to be doing. So far all we know is "currently configuring a new server for my network and really hate the whole tape backup thing". Hence my suggestion about the mirrors.

All this is pretty off-topic and possibly of interest to no one reading these forums but us. But, I'll asnwer your questions.
I'll spare you my resume, (unless you ask in private).
You are correct or close on all points; So I don't doubt your background or experiance.

COST
A DLT does not cost quite as much as 10-20 300gb drives. They range from 1500 to alot more (10x's that for a good autoloader/library system). I think a 300gb drive is around 330.00 for the external model he is looking at. Used DLT drives can be had for as little as 700.00. So a more accurate range would have been 2-20x's as much.
Media cost is fairly high. But a fraction of the cost of the same size disk, which is his alternative. Single DLT tapes cost around 75.00, bulk orders can pull this down quite alot.

Reliability
DLT's fail VERY VERY rarely. The drives do fail. But they usually come with very generous warrenties. The tapes can fail, but I have seen literally 100's if not 1000's of DLT tapes and never had a failure of this media type. DDS3 (now replaced with the bigger, better, etc DDS4) is slightly less reliable, but not a problem. I have had 7 yr old tapes that were poorly maintained (re-used, etc and then left in a desk drawer for many years) and had over 90% success rate with these too. Reliabilty is what tape drives are all about. You can not denigrate them for this. This is their strength. Their weaknesses are cost and the hassle of all the tapes having to be correctly cataloged, managed and stored.

SCSI
I would disagree with you that SCSI is less valueable for small servers. Even the smallest server must support concurrency and no IDE drive supports this. But all SCSI drives made in the last 10 yrs do. They are faster as well. But most importantly they are more reliable. IDE drives are fairly fast (certainly fast enough for most uses), and very cost effective for all but the most demanding of tasks (ie: servers and very high end workstations, or A/V production). Also if a SCSI drive dies you will probably be able to (at a cost of 350 to 5000) be able to recover nearly 100% of the data. Being the cheapskate that I am, I move my home main system (not my home server) from SCSI to IDE. 4 months later my 3yr old kicked over and killed my external backup HD. 2 days later (while I was waiting for a new back up HD to arrive) my new internal HD up and died(not related to my son, just bad luck). I had alot of very valuable data that was no longer on any working HD. I called around and found the best data recovery service. They charged quite a bit, but were not able to recovery ANY (0.00%) of the data on my drive. I also recieved a very expensive lesson on IDE drives from the lab. I spoke at length to them about it and they told me that they almost never recover data from a catastophic drive failure if it is IDE and almost always do very well on SCSI. A bitter lesson to be sure. Especially since I had only a 4 months previously been strictly SCSI.

RAID
Raid write speed does vary with the factors you list. But even in a less then ideal setup without even a proper raid controller, even a SCSI software RAID will be significantly faster in write speed then a single drive. It is just how SCSI works. It's costly but cool.

OPTICAL
Sure a fixed (meaning sealed) CD-R/DVD-R lasts longer then an unsealed one. And they are easier to handle and store then tapes. But a good optical jukebox will cost you as much as a DLT solution and is not more reliable or longer lasting then the DLT solution; it is mainly because it is more convient. If you take a huge stack of"fixed" cd-r's or DVD-r's and a plain old DLT drive (remember they hold far more data) and leave them in a metal filing cabinet for 7 years, which one has the higher proablity of failure during a restore? The optical platters. It takes many more of them and they decay even when sealed (ie: the difference between water proof and water resistent). I don't know of any shop that uses optical backups for enterprise solutions. There is a reason for that. Total cost is higher (much more media needed). Handling of so many media elements increases the probabilty of misplacing one, and of course their is the lack of longevity. Do you know of any IT shop that is using optical media for backups at above the workgroup level? Also, I don't know of anyone that takes the time to seal their media. Adds time, money and complexity to the process.

Backups
I don't think mirror drives are the solution. He already has RAID. This is the better solution, just not the cheapest one. I think using large low cost drives (either externally or in another low cost backup server) as his backup system is a viable alternative to the fairly costly tape method.