Say you have some 5 GB of critical data (photos, documents, program installers, etc) on an hard drive that you want to save to an offsite location. You can either copy these files to an external hard drive and put it safely in a bank locker or better still, subscribe to any of the web based data backup services.

EMC Mozy, one of the most popular online backup services, charges $4.95 per month for unlimited storage. Rival Carbonite also lets you can store unlimited data for a flat annual fee of $50. Then there’s Amazon S3 where you pay 15¢ per GB of storage space per month plus an additional 10¢ per GB of data transferred (one time fee).

Now compare these rates with that of a web hosting company like Dreamhost where you can rent 500 GB of web server space for $120 per year - apply a $100 discount coupon code and the storage cost works out to be just $20 per year. This seems to be the best option but before you run that rsync utility, read the policy:

“The customer agrees to make use of DreamHost Web Hosting servers primarily for the purpose of hosting a website. Data uploaded must be primarily for this purpose; DreamHost Web Hosting servers are not intended as a data backup or archiving service.”

Robyn Peterson, chief technology officer for Ziff Davis Media, was looking to store some 250 GB of his personal data online and opted for a web hosting company that offered server space at rates comparable to that of Dreamhost.

The backup process was long but smooth (Robyn is a geek). And then one fine morning, he discovered that all his files have been deleted from the web server without any notification. The tech-support team responded saying that they “have been cracking down on people using our services for backing up files.” The data was never recovered.

Related: Comparison of Online Backup Services, Mozy Review