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As far as I am concerned NO! They are not obsolete.
As a matter of fact I believe that a good AIT Tape Drive is very reliable especially when used with Norton Ghost Imaging. I have 2 External Drives, an AIT1 UI 35GB Native - 91GB compressed capacity and an AIT2 UI Turbo 50GB - 130GB, both Sony (with USB & Firewire - UI), for 6 years now. They have got me out of serious trouble countless times where I would have had to clean reinstall or repair Windows as the only other alternative (My OS is Win XP Home). These drives use 64k Advanced Intelligent Tape (AIT) media.
I hope this may help some people out there?