The topic of disaster recovery could easily warrant an entire chapter on its own. Microsoft has published an excellent technical document specific to Project Server 2003 titled "Project Server 2003 Disaster Recovery Guide," and it is freely available from the Microsoft website.
One vital element to a solid disaster recovery plan is testing your backups regularly. After all, backups are only as good as the restore. Just like any data, backups can go bad making restores impossible. Just because a backup appears to be successful doesn't mean a restore will be as well. Problems with indexes or tables in a database can result in restores failing, so test your backups regularly!