We used the digital wallet kind (Super Digibin) and it was nice, especially when CF cards were $$$.
The batteries didn't last very long, but I got an external battery pack and it worked well. We did have 1 drive fail, but it was user replacable.
We didn't lose any data, but it was a scary thought - after that, we decided to stick with the CF cards, especially since the prices are so low now.
As for backing up data, the only concern I would have would be the fact that they are portable makes them an easy target for damage. You can get a 1TB (that's 1000 GB) Network Attached Storage for under $1000, and they have features like RAID for data security. Not nearly as easy to transport, but more secure.
The fact that I'm recovering a hard drive now may skew my answers a bit, too.

Ah well! At least it is all recoverable, and I have it backed up if it isn't.
Good luck!
Shan