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@rusty
I have a 160GB Iomega. You definitely want a 2.5" portable drive because having to plug it in to the wall is just not good. I was originally going to use superduper or CaronCopyCloner but for some reason I don't anymore. I just have it partitioned as Backup HD and Storage HD. Backup is for TimeMachine and Storage is for videos that I don't want cluttering up my Macbook.
I'd have to say that I'm considering stopping my TimeMachine backups because If my Macbook were to suddenly go pop I'd have to get my Leopard CD and HDD and it would take a few hours of installing and recovering to be back up and running. With something like SuperDuper of CarbonCopyCloner you can be up and running off the external drive in seconds.
Also I think Intel macs can boot off USB so that's not so much of a problem. One problem however is that you can't have a bootable drive that is readable on a PC (I think)