Well, it looks like I have to give up the ghost on this one. Thanks everyone for helping.

But, you know, one answer leads to another question and since this whole thread was about a backup that failed, Diire wrote

Unfortunately DVD's and CD's are not really good for backups as you've found out the hard way.

Well, I certainly did. Now, I had always been told that I should backup to dvd/cd. The reasons were:

less storage space (physical that is)
not susceptible to magnetic problems.
inexpensive at about 15c each.
portable.

External hdd are bulky, susceptible to magnetic problems and all backup data is on the same device.
Tape is bulky and susceptible to magnetic problems. tape drives are not readily available on a backup pc.
Flash drives are a better option because they are not bulky but are still fairly expensive.
Offsite storage, while the best option can become expensive when you have 1TB of data. Also, you need to have backups local as well as offsite for immediate OS restores etc.

I do now use flash drives for moving data but when I stored this data originally, flash drives were smaller and more expensive.

I also use external storage for local backups.

So, in everyones opinion, what is the best backup/storage method? - given that some data must be stored locally.

If the data is important - then tape drives. They're expensive but i've never seen a backup fail to restore yet and I've always tested them monthly.

Zip drives are also good alternative and much cheaper.

CD's are more reliable than DVD's but you have buy quality CD's like TDK GOLD. I have some files (not important ones), etc on CD's that i've had for 8+ years that still work fine and other files on cheap CD's less than 2 years old that don't work anymore. I guess it comes down to you get what you pay for.

I always backup my important data to 2 different hard drives in 2 separate pc's and also use online storage just in case. External hard drives are good but they fail more often than internal ones because they're moved around so much. More chance of them getting knocked around and dropped.