Call me old-fashioned, but I'm not comfortable backing up all my stuff onto "the cloud."
First of all, it would take weeks. Literally. I have a (at best) .5MB upload speed.
Online backup is *fantastic* for certain things, particularly small but hard-to-replace data sets and such, but I don't really see it as taking the place of cheap and fast hard drives for thorough backups anytime soon.
I guess it depends on how truly secure you want your data to be. I've been using an external drive for a long time to do backups, originally using SuperDuper and then moving over to TimeMachine when that became available. That is definitely a very cost effective option and one that every computer user should be taking advantage of in my opinion.
But...
This thread also got me thinking of how important my data really is on my computer. All the photos, important documents, records, music, and other such things that would be completely lost if something happened to my home or in some other scenario where I lost both my MBP and my external drive.
So I actually signed up for
Mozy Home so I can have secure offsite storage of my most important documents and files. Even paying for their unlimited space option comes down to less than $5.00 per month which to me is pretty good considering the "insurance" it provides in a disaster.
In the end, I agree, external hard drive regular back ups are great. But depending on how important your data is and how painful it would be if you lost it all, an offsite solution of some sort might be worth looking into.