IMO I use pen drives, PMP and HDD as primary source for storage. Considering the price tag, pen drives are more economical for persistent data storage and HDD for long term large data.
CDs and DVDs both fail at times while reading. I hope flash memories will become norm in coming years.
You can always make a USB install CD for most of the distros and some of the distros come with easy installers too.
But the thing is about data storage, I have lost countless data. Of course I used DVDs from Sony, HP and Moser Baer.
Its been a long time since I reinstalled my OS. Its simply that it never broke

And storing data on HDD can be secured from viruses. Use the partition type which windows can't read or simply don't mount the partitions you wont need.
I have two HDDs converted to ext3 format. Just one partition is left as ntfs.
And remember to use a good UPS, coz most of the time HDD fails due to sudden crash or improper shutdown. Whenever there is need to shutdown withing 5 seconds I just do a REISUO to flush all cache and safely umount paritions and remount as read only.
A good ventilation is also required for overheating HDDs, my cabinet is open for that purpose. Anyone can see the HDDs standing erect at the bottom to provide even heat dispersion.
These simple tips can save you a load of headache.