Small Office Server Backup

[leftbrain99]

My father runs a small office (~5 employees) and employs a small Server box running MS Server 2003. I do a lot of the network troubleshooting, but I am not really an IT guy. The Server has a 60GB drive, soon to be upgraded, but it is barely at 50% capacity. The Server hosts the software that the office employees use to access and process files, MS Exchange, and also scanned copies of client files.

He is backing up server data nightly using an old tape drive, rotating 5 tapes. The tape drive is becoming troublesome. The backup software is Veritas, now owned by Symantec. I am looking at options. Would an external HDD with an automated backup utility be sufficient to replace the tape drive or is a tape solution still considered ideal? I am also looking at online data storage solutions, and perhaps a combination of onsite backup and online backup. It is difficult to get through a lot of the information about online data storage, though. I've looked at Data Deposit Box (I'm not sure they support MS Exchange), Mozy Pro, iBackup, SOS Online Backup. Can anyone with experience here offer some suggestions?

Thanks in advance.