I like Elizabeth's advice, especially about backups. I might put them on the SAN IF I was sure they were on physically separate disks, but you want to make sure if the data is lost, the backups are still around.

SANs failing, it can happen, but you might not be able to get enough hardware in place to rebuild a server anyway without getting the SAN working. Hasn't been a big concern and many people don't buy one SAN, they buy two.

I would still make sure my backup files were being pulled to tape or another server as well.