We use RAIDed file servers and our hosted data is spread across a bunch of them. The data on any single hosting server may be spread across several separate file servers and each of those file servers is completely redundant.
The filesystem snapshots are done several times a day but they are only stored for up to two weeks. We do have longer term backups in case of catastrophic failure but we would not go onto them to look for a specific file you may have lost as it’s a big task to do so.
- DreamHost Head Honcho/Founder