I do burn my kits to DVD. I also have everything on my EHD. Although, I don't really have any sort of a 'system' for the backup DVD's, so if I were to lose stuff, it's not like I'd know where to find it on a DVD.
I just put stuff in a file folder as I get it and once it reaches 4GB, I burn to DVD and just label it by month. Not a good system, but if I were to lose ALL my stuff on the EHD, I'd at least be able to load lots of my stash back onto a new drive.
I would be more devastated if I were to lose my photos. Sure, I'd miss some of my digi goodies, but after 4 years, I have SO much stuff that much of it doesn't get used anymore. I also tend to scrap with my newest kits.