I don't think there's any kind of hardware RAID that would be usable on that setup, you'd need too many extra drives for the budget and RAID 1 would be messy to set up given you've already got three drives full of data...
In that money you can get
two 80gig, fast drives at £160 for the pair, but it won't afford you any data security, it'll just give you an extra 160gig of space =/
Crappy as it sounds, CD-R seems the best solution if you want both extra space and backup.
So I'm fired then.