1. Lets just do a breakdown.
Traditional IRA/401k: Money goes in pre tax, you get a tax deduction, so you save tax money this year. Money grows tax deferred, you pay taxes when you take it out. If you take it before 59 1/2 plan on paying a 10% additional tax penalty. Great if you think you pay higher taxes now than in retirement.
Roth: Money goes in post tax. No tax deduction now. Money grows tax free and you pay no taxes in retirement. If you take out the CONTRIBUTIONS early no problems. If you take the EARNINGS out before 59 1/2(and having had the account 5 years) plan on paying taxes plus penalty. Roth is normally better if you are paying less in taxes now rather than retirement.
Curve ball: If you are MAXING out the accounts the Roth is normally better. Putting 5500 in after tax money into an account is not the same as putting 5500 into a pre tax account. From a time value of money standpoint the Roth lets you shelter more money on a tax adjusted basis if you are maxing out the contributions. So even if you are in a 25% tax bracket and plan on being in a lower one in retirement the Roth is often times still better if you are trying to put away as much money as possible. If you are in the 38% tax bracket the traditional might still be better.
2. If you want 100% safety go with a high yield savings account. If you are ok with a possible 5% swing in a bad year you might also want to look at short term bond funds. If you are ok delaying the house purchase because of market conditions and/or you can handle a 10% dip in the value in the short term you might also want to look at VASIX. Its 80% bonds 20% stocks, uses index funds for its diversification, its very low cost, its liquid(you can w/d funds with no penalty), and in 2008 it was down about 10%(the only year its been down.. I think ever). Its very conservative. 80% bond and 20% stocks is a pretty good ratio if you want to minimize volatility. The small % of volatile stocks help hedge the big basket of bonds against interest rate swings, but the stocks make up such a small piece of the pie that the bonds hedge away most market fluctuations. I personally use it as my emergency fund. Its low risk but long term it should beat the pants off any savings account.