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Planning Disaster Recovery

We're trying to plan a disaster recovery setup offsite and I would like to hear what others are doing.  Currently we use DLT tape backup for daily backups (Dell tape device, Arcserve as the software), then move our tapes offsite (same town, different location).  Other than having tape backups we really have no disaster recovery.  What we'd like to have is a server or set of servers (possibly virtualized?) at a remote satellite office that we could use to do a nightly backup to, for our main servers and our data.  Ideally if we had a huge disaster in our city, we could move to that site and have our Mail, Files, Domain Controller and all of our data that goes with it, with only losing the data from when it last did it's "sync".  We've looked at Data Domain, and it look like a great product, but it's a bit on the costly side...we figured there might be a way that's just as good but cheaper.  Any thoughts?  Thanks for your input!
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Thanks for everyone's input!  Anyone else have a different way they operate?
The only thing I would worry about is being in the same town.

Do you have a trusted employee that lives a little distance away? The other side of the flood plain or other geographic feature. Could you have them shift tapes on a daily/ weekly basis?

Either way, Glad to be of assistance. May all your days brighter and brighter.