True, backing up 700GB IS a hassle but how much of this really changes? If you are talking media than I would expect that most of this is static data. This is the case in my situation. 1TB of movies and audio with the occasional movie or itunes download added. After the initial backup of the data I need to only add to it whatever I add to my collect. This can be done periodically. To what, would be off line drives that I only plug in to add data to. I believe that any backup scheme that is constantly online and powered up has the risk failing. Yes, it is true that there is a chance that the drives I keep offline might someday not power up when I need them but the amount of time that they are online is so small that I doubt that will happen. As far as cost is concerned what does a TB cost these days, $250.00 USD? (Based on 3 320GB drives at $80.00 USD each)

Also I didn't realize that you where planning on using your raid as a backup storage for data that is kept online in another location. When I was using RAID5 it was the total repository of all of my media. There was no other backup. At the time I considered RAID5 to be sufficient unto itself. This was a mistake. How are you planning on monitoring the status of your drives? I used the Promise Superswap 1000 drive bays that gave constant condition status via LED’s. Even with this I lost my data once. You think it’s a hassle copying 700GB? How about re-ripping a TB? I guess I have been burned too many times. What I purpose is probably extreme.
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