I agree with the Rocket Man on I bonds if you want to play it safe. I bought my first one in October. The current interest rate is 3.67% through April 2005. It is composed of the risk free rate + an inflation premium. Here's a good FAQ on them:
http://www.publicdebt.treas.gov/sav/sbiinvst.htm
and you can purchase them at:
www.treasurydirect.gov