Tape backup or another server??

On our network, I have 6 desktops running XPPro, Also have a dell P2600 server running Server 2003 STD. We are looking for a backup solution. I developed 1 using a dell tape driver. With all the licensing, software & media, it’s around $3600. We paid along the lines of $3700-$3800 for the server itself. Would we be better off buying another server and using it as the backup? What might be some of the pro’s & cons?
Thanks everyone for your help.