Which harddrive/backup drive for my iMac

I have a 20" aluminum iMac, about 1 year old, running Leopard.
I the the internal HD has capacity for about 250GB if memory serves me right. I have about 200GB of stuff on it now, most of which is pictures in iphoto, music, and videos.
Was thinking I'm going to need an external hard drive for storage and/or backup. But I'm not sure if an external HD can accomplish both? Was looking at a Gtech or Lacie. Basically I'm going to run out of room on my internal drive, so how do I move my older photos lets say to the second HD? Simply copy them over? or is done by backup, then I can erase whats on my internal HD?
Also, I have a lot of videos, movies, etc. If I need to move them off the internal drive for space reasons, whats the best way, by backup thru time machine, or simply just cut and paste onto the new HD? Can the new HD act as a backup device along with a storage device at the same time? ie can I backup to it thru time machine, plus have say a bunch of movies sitting on it too, ready to access without having to restore them via time machine?
Sorry for all the ?'s. I'm sure there is an easy answer, just that I dont know the ins and outs of backing up, or simply using the external HD for storage, physically moving the files over
Thanks for any help

I'm of two minds about this. I have reservations about Time Machine's and Time Capsule's stability and reliability (based mostly on both being first generation products). One problem we've seen with the combination of the two is the problem of Time Machine 'preparing' a backup but that preparation stage stalling. In most (but not all cases) this is fixable but I've seen/heard of a few cases where the only solution was to wipe the backups and start over. Not a good solution. This happens less frequently when TM is connected directly to the computer. Although I've done some pretty serious testing of TM and it has yet to fail me, it isn't time tested the way other backup programs are and that makes me think twice.
Further, TM isn't a bootable restore system so if your system becomes unbootable at the very least you have to install the OS again. I'd rather have a bootable backup (as part of my backup plan) so if I need to I can plug in an external drive, boot up, use TM to restore the last backup of files I was working on, and get right back to work.
At the moment I see TM as part of a backup system but not as the sole plan.

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