Mac Pro drive configuration/expansion advice for Time Machine

I have the following:
Mac Pro 1Tb internal drive (2 x 500Gb in software RAID, so 2 drive bays used, 2 free)
500Gb external drive (Formac XTR platinum - 2 x 250Gb in RAID)
I use SuperDuper to backup the internal to the external - I'm using about 440Gb on the internal and this fits on the external with about 10-20Gb spare. However, my usage of the internal drive is growing, and as Time Machine backups grow in size, my 500Gb external will very quickly lose the ability to go back in time and shortly afterwards run out of space for even a simple backup.
My options are:
1. Buy 2 500Gb IDE drives and upgrade the external to 1Tb - Cost about £140. If I put the redundant 250Gb drives in enclosures and sell them, net cost would come down to about £100
2. Buy single 750Gb SATA drive and install internally for TM backups - cost £110. Sell external drive and cost comes down to about £40
3. Buy 2 500Gb SATA drives and install inside Mac Pro for Time Machine - Cost about £130. Sell external and cost about £60
4. Buy single 1Tb SATA drive and install internally for TM backups - cost £200. Sell external and cost about £130
Pros & Cons
Option 1 - Con: Left with untidy external enclosure. Pro - 2 internal bays free for expansion.
Option 2 - Con: Less internal expansion, Pro: No untidy external box, can add another 750Gb drive when required
Option 3 - Con: No internal expansion. Pro: Ermmm, not sure.
Option 3 - Con: Most expensive. Pro: Longer time required before need to add another drive.
I know external drives are useful for off-site backups but I do have a 160Gb and a 320Gb external drives for that purpose (and for TM'ing my MacBook).
I think I've answered my own question - get a 750Gb SATA drive and stick it inside.
Regards,
Steve

I am in a similar situation. I have a 160gb for my boot/system drive and two 500gb for data, backed up to two other 500gb drives. Both 500gb drives are about 80% full and I bring in 50 or gig a week, paring it down quite a bit, then importing new photos and culling them out again. I may replace my 160 backup drive for my boot partition with a 750gig, but I don't see Time Machine being capable of backing up a 500 or 750gig drive that had several hundred gigs of current data and moves gig after gig onto and then out of the hard drive. I think Time Machine will be really great for many many people, and if it allows me to "roll back" my system to an earlier known-good point in time even better than my current method of using superduper when I feel my system is stable, then Time Machine will be great for me too, but I don't see how it's going to be usable for data backup for heavy professional photographic work or for video backup where large amounts of data are entered, deleted, entered again, deleted, etc etc. There isn't enough anectodal information on Time Machine to know what size is going to be really required, but I think most folks will be surprised at how much room is going to be needed - especially those that use their machines heavily. Mom and Dad who do nothing but a few emails and surfing the web will have no problem, Mac Pro users involved with grahics and video...not so easy I'm afraid. Time will tell.

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