Does my iPhoto back-up plan sound reasonable?

Question

Thanks to great info in some threads I've read here, I'm well on my way to finally organising my zillions of photos/videos, using iPhoto Library Manager. (I started merging everything into an empty external HD, and eight hours down the road, it looks to be about another five hours or so.)
I've tried to come up with the optimum back-up plan for myself, but I could really use some experienced advice on whether this is really the right thing for me or not.
The plan:
My iMac internal HD is getting cramped, so I will empty all photos off it and keep ALL photos on a single (for now) EHD, instead. Back-up will be in DVDs (another one burned every time I get another DVD-worth of photos on the EHD) as well as a temporary back-up on the iMac internal HD of the new photos that have not yet made it to a DVD.
Is this a reasonable plan?
If I were to, say, want to make a book, I would create a new (smaller) library for the book, so I could back it up on the iMac internal HD. And I would then burn that library with its book onto a back-up DVD, before removing the book and its library  from the iMac.

Answer 1

Most of my pictures are in PSD (photoshop format) - as most were scanned in from old prints and had to be restored).
I keep them in folders for each event - used naming conventions of date of event and picture order.    Imported them into IPHOTO for Faces function and ease in printing.
As I imported the picture to IPHOTO - it gives me 2 copies on my hard drive and I have a time machine backup & a second backup of my User library that I do weekly (two copies on that drive) and have burned DVD's and also printed some restored pictures.
Keep in mind there that JPEG reduces the clarity of pixels every time you save a picture.  JPEG2 does not reduce the clarity when compressing a picture.