I keel my original and two copies of my RAWs until I've got two verified DVD copies of my post-processing DNGs, then I dump my RAWs. When I fill a card or at the end of a shoot, whichever comes first, I copy the card to an Epson P-5000. Back in my office I use ImageIngestorPro to copy the RAW files from the card to two external hard drives (I'v a total of 28 Gb of cards so so far I've never had to reuse a card on a trip before I could download to my computer). I then use Bridge to verify both copies of the RAW files before I reformat the card in my camera. When I'm ready to process, I copy one of the RAW buckets to my local hard drive and then process through Adobe Camera Raw. Once I've done my raw processing I then move the processed RAWs to another folder from where I run the Adobe DNG converter, converting to DNGs in yet another local folder. I verify the DNGs in Bridge, then I then copy the DNGs to an external drive, verify the copy and then burn two copies of the DNGs to DVDs. I then take both of the DNGs and verify them in Bridge. When I'm comfortable that I have solid DNGs on my archive external drive and on two DVDs, I'll then delete the RAWs and, as my local hard drive fills up, delete the DNGs from my local drive. So I start with three copies of the RAWs, each on separate drives of which two are external, and end with three copies of the DNGs on separate storage media, all of which are external.
My processing sequence folders are:
1) Card - from here I copy using IIP to:
2) Download folder
3) Download folder copy. From the copy folder I then use Windows explorer to copy to:
4) Add Metadata - The boiler plate stuff is added in IIP and I'll correct errors and add more in Bridge. I then move these files to:
5) Rate and Adjust - where I'll pick out the winners and mark the duds, then do gross adjustments to all and finer adjustments to the winners. I then move these files to:
6) Convert to DNG - where I run Adobe DNG converter which leaves the original RAW files here and creates DNG versions of the files in:
7) DNG to Archive - from where I copy the DNGs in the same folder structure to:
Archive - where I archive the folder structure in DVD sized buckets, import to Xmedia and complete the metadata and catalog sets, sync the annotations back to the DNGs, then burn my:
9) backup DVD 1
10) backup DVD 2
When creating images from the RAWs, I'll keep a three copies of the master layered PSD file and three copies of the final TIFF or JPEG so that when I need a derivative image, I don't have to spend time to recreate it.
When I get some more cash I'm going to get more on-line storage as Peter suggests in hid JBOD approach but I know I'm never going back to many of the places where my images were taken so spending a few dollars on making two DVDs is a small price to pay to secure the backups. I keep one set of DVDs at my brother-in-law's house - no point in having all those copies stored in the same place.
So, create new buckets as you go through the process and if you need the space (many people keep their original RAWs as well as their DNGs and derivative images) only delete your orignal RAWs when you have two verified back-ups of your post-processing DNGs.
I maintain a folder (bucket) per image-set on a card - be it 5 images or 248 - and let that bucket be represented in the DNG folder hierarchy as it is in the RAW folder hierarchy. For my derivatives I just let them build up to a DVDs worth before burning them off to DVD (with copies on two external hard drives) and use Xmedia to track them - so I backup my catalog to two external drives also. Having just written this, I think I need to take a copy of my catalog over to my brother-in-law's house also!
Hope this helps.
I've worked with personal computers since the mid 1970s and, touch wood, I've never had a hard drive fail on me - since the early compaqs, I've always used luggables/laptops as I think they're more resillient. My wife's lost a hard drive on her Dell once - we recovered about 60% of the data on it. Now, while I've never had a hard drive fail on me, I have had two laptops stolen, dropped several others and spilled beer over one, so offline backups are essential becuase stuff happens.