I use my Mac mini as a server as well. It is a ftp server, web server, a print server, a media server, ( iPhoto, music and video) Here is my set up. the mac is an older model so the internal drive has only 80G, but I got a 500g external USB drive where I store all my server related files. To me that makes more sense since I can carry the external anywhere. Anyhow, regarding your question about back up, I prefer SuperDuper over Time Machine, basically you can make a complete bootable clone of you main drive so in case of emergency, you still have a complete working drive. You will need another drive with the same or greater capacity for the clone. The down side of SuperDuper is that it could take a long time to clone your main drive.