I won't insult you by advising on your network.
I wouldn't take any advice as an insult. I am doing this for two reasons:
1. Have a safe place to store important files
2. To learn to build a complete, secure system.

If you think there is a better way to do it, I'd definintely take that under consideration.

As for the data storage, I am definitely getting new drives to store the data on. If I even do use the old 6gig it would only be for the OS (which could be reloaded from a ghost).

I will look at backing the data up using a DVD drive. Perhaps some sort of network backup where I can just fire the data to the DVD writer on my main system?

It's true about being paranoid. I looked at the PCs at my university residence (both the lab and students home machines) and I saw probably a dozen cases in two years where students lost EVERYTHING, including the essay due tomorrow, to hardware failures.

Again thanks for your input, but let em know if you have any thoughts about the network setup itself.