Here are some answers for those of you that are interested. Keep in mind this thread is geared for those of you with Dedicated servers only. Shared, Reseller, Semi-Dedicated and VPS have different solutions available to them.

Keep in mind these are "Today's" prices and these are subject to change at some point in the future.

Off-Server FTP backup (same datacenter):
$2.00/GB sold in 10 GB increments. This is monthly recurring.

Off-Server Rsync backup (same datacenter):
$2.00/GB sold in 10 GB increments. This is monthly recurring.

On-Server Backups (Same Datacenter, Same Machine, Separate Disk)
The price varies on this based on what size disk you want and if you prefer a one-time fee or a monthly recurring fee. The one-time fee starts at $250 for a $160 GB HDD and the sky is the limit there based on your needs. The monthly fee starts at $15/mo and also goes up based on your needs.

On-Server Mirroring and or Striping - (AKA RAID)
We offer this for those that want it and you will need at least 3 Hard disks for a reliable solution. 2 minimum for the RAID array and one for on server backups to a standalone harddisk. Price varies here and you'd want to select a RAID option when you perform the server build in most cases. If you already have a server chances are you'd need to order a new one so that the proper hardware can be installed.

If I can get an additional HD put in my box for about $15/mo, whereas the off-server package is $20/mo for just 20GB, are the advantages of off-server backup worth it?
Probably not unless you are extremely unlucky and for some reason your machine catches on fire, but in that case, its probably not just your machine on fire, its probably everybody's, and my guess is the fire suppression system is going to give a nice squirt to those machines that did not catch on fire, so you might be waiting a while for components to dry off before you get your data back anyways.

A secondary drive is a very good choice and more affordable.

What are the disadvantages/advantages of each option?
Local
A secondary drive is also more reliable and more secure than an FTP backup. The chances are extremely thin that usernames and passwords would be intercepted over FTP, but it is a plain0text protocol so if your backups have sensitive data, I'd say don't do it.

FTP
The advantage of an FTP backup is isolation from the same physical unit and can be good for some that want that sort of protection, and don't have particularly sensitive data.

Rsync
The advantage of using an Rsync off-server backup is that rsync uses ssh which is a secure data transmission protocol and it is much faster than FTP. The disadvantage is it is expensive to setup unless you want to write the scripts to do it.

RAID
The advantage of a RAID setup is that, should you loose one drive (or ore if you have more than 2 in your array) is that you can sustain a broken unit and still be serving up webpages, email, etc. If you have a hot swap setup you can get a replacement drive in the machine without ever having to power the unit down to replace the drive.

The disadvantage here is that it is expensive, and is not 100% foolproof, and, that if you have corrupt data on one disk, it can be corrupted on both disks. In addition to your RAID, you are going to want some sort of backup like the ones listed above for archival purposes.

All of our shared servers use local backups to a secondary drive. Some of these servers are in RAID + a local drive. Some clients have custom setups and they use Rsync to servers in the same facility for their backups.

Hope that helps. If anyone else has anything to add, please do.