For just 40GB, you can go in any direction.
I use twin raided drives (1TB total) for CDs and current listening. If one fails, pop-in a new drive and rebuild the raid.
I burn the rest to DVD by Artist, then catalog the DVD in Music Collector (Collectorz.com cataloger).
I do not use backup software. Waste of money for me. My OS is on a seperate partition, and easy to rebuild/reinstall without harming the other partitions or drives. Some backup devices/software use their own flavor of format, so choose carefully. For some interesting hardware selections, check these out...
Netgear SC101 [http://www.netgear.com/Products/Storage.aspx]
D-Link DNS-323 [http://www.dlink.com/products/?sec=1&pid=509]
Thecus Y.E.S. Box N2100 [http://www.thecus.com/products_over.php?cid=1&pid=1]
I have heard good things about the YES Box, and the iTunes share and FTP options are nifty. The D-Link also sports FTP. The Netgear has it's own flavor of format but is cheap. FTP makes it a snap to download from anywhere to your cell phone or other wireless handheld. Just some ideas to throw into the mix.
Lots of interesting and vaired answers here. You can tell who are the techies.
Good luck in whatever you choose!

PS: I've never had a DVD go bad, only a CD, and that was my fault as I failed to notice the cheesy blanks I bought were virtually see-thru when you held them up in front of a light. I was able to recover from them by slapping on a plain label and re-archived them onto TDK DVDs. Why TDK? Because not one person I know who uses them has had any kind of failure on one yet in the last 5 years (except, of course, for user error).