I use back up hard drives all the time. (dos and windows) I can get a down vmail back up and working in the matter of minutes to the was it was at 3:00 am that morning, if all that was wrong was a hard drive.

If you are looking for room you must have a rack mounted pc. One way I got around not being able to put in a hard drive was just by using a laptop hard drive and rails. They work in all the machines I use from Vertical/Comdial. They make converters for the IDE cables. These work great.

I also have used usb hard drives. These work good also. Just run a batch file that calls to the stopvm command xcopy the whole vm directory then run the ntreboot command.

I always ghost my drives and then create two backup files on the backup drive and alternate the days to them. you could keep 7 days worth on the backup drive if you wanted. I found 2 seems to be the right number for me.