Does iCloud negate my backup hard drive?

I recently upgraded to LION, then from MobileMe to iCloud. When I tried to do a backup of my MacBookPro using Time Machine and my external hard drive, the "setting up backup" function took much longer than usual and never stopped to go to backup. I finally ejected the hard drive and gave up.

Since I'm now on iCloud, s my external hard drive unnecessary? Or do I need to do something so I can back up on both iCloud and my external hard drive? Thank you in advance.

You would need one amazingly large and exorbitantly expensive iCloud account to use that as a full backup of your Mac. So no… keep the hard drive for regular backups.