HTPC storage and backup - NAS, Internal, External, or RAID?

Hi! I'm looking to build a budget-friendly HTPC this summer and am throwing around ideas for storage and backup. I'm planning on making my HTPC fit a micro-ATX form factor and I'm assuming the small case will make heat more of a concern. Also, I'd like my solution to be low-energy if possible (save the Earth!) and budget is at the top of my list. Other devices currently on my network are a power-hungry gaming desktop (currently backs up its data on an independent 1TB internal HD), a laptop, and a Wii.

Basically to make my media available over the network, I've come up with 3 options:

1) Keep the media on my desktop (250GB storage drive) and wirelessly stream it to my laptop and HTPC. This saves costs on HD purchases, but I'm worried about whether I'll be able to stream high def content to my HTPC and I may run out of storage space. For this to work, I'll have to keep my desktop running all the time which doesn't exactly fit my energy-saving goal. I could probably keep backing up to my 1TB internal drive.

2) Move my desktop's 1TB drive to my HTPC and store the files there, making them available over the network to my other computers. This relieves my worries about streaming high def content. While I'd have to keep my HTPC on all the time, I'm planning on building it with low-power components so it will presumably use considerably less power than the desktop. For backups, I could purchase a 1.5 TB internal drive to replace the one taken from my desktop and use it to back up all 3 of my computers over the network. Alternatively, I could back up my HTPC separately by setting up a RAID system or purchasing an external HD (although I don't think I want to trust RAID to back up my media and an external drive just adds clutter).

3) Set up a NAS storage solution and only wake my computers when needed. This is probably the most energy efficient, but again I'll have to deal with streaming HD over the network and ponying up the money for a NAS drive (which can be quite expensive). I'm not very knowledgeable about NAS, so I'm not sure how backups will work here.


In summary, here's a comparison of the 3 options:

1) Only have to purchase a small, cheap HD for my HTPC
May have streaming issues
May run short on storage
Power-hungry desktop must remain on at all times

2) Must purchase a 1.5TB internal drive
HTPC plays media locally, so no streaming issues
More energy-efficient HTPC is left running at all times

3) Must purchase a NAS drive (and another drive for backups?)
May have streaming issues
Only the NAS must remain on at all times


What do you guys recommend? Like I said, I'm leaning toward option #2 as it's a happy medium between expense and energy-efficiency. Is there a better solution I haven't thought of? Thanks for the advice!