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I have two 512 MB memory cards with room for about 175 large, high quality JPEG images on each. I don't often shoot more than that in a day, but I have the second card as a backup. (I've had two of these CF-type memory cards completely fail on me and become unreadable without warning. Still don't know exactly why that happened.)
Once the images have been transferred to my computer, I store one set on my hard drive to work with and one set on a CD that gets put away and not touched.
I don't save and resave the JPEG images that are on my computer, though, so the issue of re-compression is not a problem. I keep one unchanged copy of each photo and I save any edited versions with a different file name, usually as Photoshop PSD file because by then they usually have many layers.
Yes, I use a lot of CD's to archive the images, and I had to upgrade my hard drive last year too, but those things don't cost much.
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