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online backup vs external HD vs software backup?

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I am using Mozy as a backup source, but is online backup really worth the monthly expense for the typical home user? Would it be better to backup evrything I want to an external hard drive or is there a program that might be a better approach? Like most people, I have lots of pics, music (Itunes) stuff like that. Is taking an image the way to go or does doing so also copy any problems one may be having with the operating system? Please know your help is appreciated and I hope I am posting in the right forum. Thanks!
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Do an encrypted, password-protected backup to DVDs, store one copy in a Safe Deposit Box near you, and then mail copies to a few trusted relatives that are scattered around the planet.
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