I find myself doing more of my work in the cloud, mostly courtesy of Google. All my Gmail messages from when I first started using it in Sept, 2004 are instantly searchable and available anyplace there is an Internet login. I rarely delete anything apart from bacn and the spam is automatically filtered (so none of those wonderful offers from the the guys in Nigeria who wants me to help them move a little money around smile) All my other email accounts bump into to Gmail with POP or IMAP so the only ones missing are the ones that the university's email server loses when it craps out, which is fairly regularly. I use an application called Gspace that allows me to use my Gmail storage capacity like and FTP account for music, pics and stuff. Even so, I am only using 20 % of my total Gmail storage capacity for my main account and they keep bumping it up all the time.
I used Word and Endnote for writing documents and papers for a long time but now it's Google Docs and Zotero. Same deal, nothing is on anyone physical machine so access is available anywhere there is an Internet connect.
I did the redundancy thing for a while but kinna got tired of it. So now I'm working without a net, no belt and suspenders, (or no condoms and birth control) Gotta figure if the Internet ever gets that un-usable it is time to head for the hills anyway.
I am the board treasurer for a local charitable organization and use Google Spreadsheets for all the budget stuff, the monthly reports and statements. Works very well and it is possible to consult with the manager online anytime from a shared document. I hate Powerpoint with a passion but use Google Presentations if I have to read one.
I pay for a little storage for a few things like podcast transcription and web-casting space. I have a paid wiki account for some professional stuff but mostly I use free space. Virus protection is by way of a web-based service that does an excellent job. I used to FTP a bunch of stuff to server accounts but it turned out to not be worth the bother. I do have two IPs and I keep some activities separate.
I figure that Google has server farms all over the world with the best tech and engineering (or better that any commercial service I could get or afford) they stay on top of the vandals and the pirates. I use Firefox which gives me a bit of an edge over most of the annoying pop-ups and malicious Trojans. I try almost every social networking gadget that comes into my view, my latest favorites are Twhirl and Seesmic.
As far as I can tell, (I'm paying darn good money to acquire critical thinking skills) a lot of the hype about the hazards of the internet are fear-based marketing ploys designed to sell me useless stuff that hackers get around in seconds anyway. If anybody really want to do me cyber harm, it is going to happen. There is lot more risk from somebody stealing my credit cards or some waitress or clerk doing the double swipes.
Looks like cloud computing is going to be the norm in the very near future. The cost of online digital storage has collapsed and the ease of use and reliability has increased exponentially. In-house IT is going to go the way of steam-generated, DC electricity. All of the worlds data will be in the cloud and we will just have to tap in to what we need. Even better, we will be able to indulge our natural human capacity for creativity and sharing. That may do more for democracy, world peace and environmental sustainability than a couple of giga trillion bucks worth of bombs and security systems. It is going to make big problems for the political and social structures that are based on authority and control but I'm good with that.