Backup versus versioning?

[Bongo]

Hi all

Kind of new to the NAS world. Thinking of getting a DS410j to start with 2x2TB drives with Raid 1. It is to serve as:

• backup of important data (photographs, My Documents, etc.)
• storage of ripped CDs
• storage of purchased content (iTunes)

Many of these items will change seldom, some will change reasonable frequently, and some will be added.

Does the community have views on:

• Whether backup of the NAS or only versioning of the clients (a-la Time Machine) is warranted?
• If versioning of clients is used (a-la Time Machine) what is a good approach for use on a bunch of XP machines that will eventually migrate to Windows 7
• If backup is recommended, what external media is a good choice?
• If backup is recommended what way to connect to the external media (i.e., if BD-RW, is that attached to a PC and then just use backup software from the PC to back up the NAS)?

Thanks
Bongo