Is it necessary to do offsite backups when you're on Rackspace?
Rackspace does daily image backups of the server, which does backups every half hour. If the server is hacked, and all backups are removed, there'd still be the image backup. Then again, what if Rackspace exploded into a million tiny pieces of glittery magic?
How do you do it?
It's necessary to do offsite backups at all times, regardless of any guarantees, assuming you care about your data. The ideal solution is to have backups on-site for quick recovery, and backups off-site for disaster recovery, and both backups should preferably be situated on RAID-6 storage.
Rackspace's standard Managed Backup service gives you a nightly backup which is retained on-site (in the same data center, but in a different area of the data center).
For disaster recovery, they offer various off-site options which involve tapes being transported to a secure facility.
They do not yet (I just pushed them on it) offer a simple geographically diverse service of your backups being done to a different data center.
Some providers, such as InTechnology, do geographically diverse backups as part of their standard service.