Most cost-effective method of achieving physical redundancy
brk: Get your own ASN ;)You are on the right path with your approach #1.  Setup a failover server someplace and keep it sync'd at an interval that is the right balance between too-often and too-stale.You could opt to get a small dedicated machine from a larger-scale true multi-homed hosting company.  Run haproxy on this "small" machine, which serves primarily to redirect traffic to whichever server is currently deemed to be the "active".  Basically this is a low-end DIY Akamai kind of solution.  Your cost would be somewhere between #1 and #2.  You would eliminate the DNS-lag and the issues you can't control (other servers and clients caching stale DNS data that you can't refresh), and you would get most of the benefits of an availability service like Akamai, without the $15KUSD monthly price tag.There are other benefits to the haproxy solution as well, you can take either machine offline for maintenance with zero (theoretical ;) ) downtime, and if you ever get a traffic surge you can load balance between the two sites (which isn't a bad idea to do all the time if your syncing is up-to-date enough.  Send every 10th connection to the fail over site, just to make sure it's always working as expected).