I got a Sony DVD writer (DRU-510A) for my new PC. It was a good price for the features -- Teac and TDK both do something similar (and cheaper), but not in the silver colour.

DVD media's quite pricey, but this drive has the advantage that it can read/write DVD-R/DVD+R/DVD-RW/DVD+RW/CD-R/CD-RW media. It won't do DVD-RAM, because (IIRC) they come in a caddy.

If I had more room in the PC, I'd stick another hard disk in there, though.

Personal suggestion -- both. You'll want the DVD writer for offline backups. You'll want the extra hard disk space, because shuffling DVDs is a pain in the backside.