Situation:
My current storage needs are approximately 1.5 TB annually. This will increase to about 3.5 TB annually over the next 5 years (rough est.). This box will just be a data archive and once it is full it will only be used very infrequently if not used at all. Files are small up to 10 MB but numerous.
The solution I found best was to buy a 2U server that has 8*750GB disks, though they'd probably be 1TB today. Put the disks into a RAID 5 or 6. Using hardware RAID, divvy them up into one 50GB drive, and one really large drive. Put the OS on the 50GB drive, mount the really big drive.
Now you have a 50GB drive and a 7*750-50 drive. When you fill that up, just buy another 2U server. When you do fill it up, the next one will be cheaper and or bigger.
The keys to this type of setup are:
1) Don't buy storage you'll need next year today. The best time to buy this kind of hardware is right before you need it.
2) Look at the overall cost per gigabyte. That's the metric that drives things.
3) Understand your tolerance for downtime and data protection. If you have another copy, or a backup, and its not mission critical data, its much cheaper not to waste disks on redundancy.
We have tape backups of our systems, and factoring in the cost of tape and other costs, its still possible to get storage with a marginal cost below $1 / GB. That includes a 3 year warranty, quad core processor, 4GB of RAM which you can probably put to use elsewhere.
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