Do you recommend 2 hard-drives or one? e.g. Would it be worth the extra expense to use the secondary one as a mirror of the first in case of data loss cause by hard-drive failure?

Thoughts?

2 HDD are always better than one, either way you use them. Mirroring or even just using the second as a backup.

Any idea how I'd go about setting up a mirror? Or would it be best to duplicate the hard drive every 12 hours or something via cron or similar?

Tbh I've never attemped mirroring on Linux. Look at what data you do require to be backed up and see which solution fits your needs. For me just taking a copy of the data onto a 2nd hard disk was sufficent for my needs.

Cheers

Check this HOWTO out for Raid.