Good idea about the external hard drive for bulk backups, or you could use Mozy or Carbonite or one of
the other cloud type services, but they aren't free as far as I know.
I still like higher capacity USB thumb/flash drives because they're easily portable, you can back up your
important stuff and carry it with you, and they can be locked, in case of damage or loss, either with built
in software, or there are some freeware USB drive encrypters out there, like USBsafeguard.
My concerns go beyond a possible hard drive crash or accidental deletion of files. I also worry about what
happens if the whole place gets flooded, or gets broken into, or burns down. An external drive isn't much
good if it was sitting next to the laptop when the fire started.