Huh. There's not much in this Thing about the downside to cloud computing. Try searching "cloud crash Google" (ironically, you can Google this). You'll get a slew of articles on what happened this spring when Gmail and GoogleDocs went down for a few hours. Apparently there are already a lot of people who can't function without them.
Obligatory cynical reaction now taken care of, let's move on to the benefits of cloud computing. I'm getting more cloudy by the moment, it seems. My most recent switch is to using web-based email for my primary account. I'm making the change for several reasons, but one of them is that I'm tired of not being able to access my email from any computer I'm at. Yes, I could have left my emails on the server, but my ISP's webmail is unpleasant to use. I figured I might as well switch to a service that assumes you'll be keeping your messages online, and doesn't just offer a MB as a backup while you're on vacation.
After peeking at the Web OS articles, I don't think I'm going to need to leap into this right away. Beyond surfing the web and handling email, much of what I do just involves the basic Microsoft Office programs. GoogleDocs can handle most of this--okay, it'd be nice if they'd upgrade to the point they can handle .docx files, but if I have to, I can revert to .doc. And rumor has it that Microsoft is planning to make the next version of Office cloud-compatible ("Office Web"), so maybe a little patience is all that's necessary.
On the other hand, I really do need to pay attention to data backup. Again, with a dial-up connection, online backup was just a fantasy. Now it's a practical option, and yes, sounds much cheaper than the therapy I'll need if I lose both the computers and the external hard drive.
At present, I don't think cloud computing is affecting my productivity one way or another. Basically, I don't take my work home and I don't travel as part of my job, so I almost never have to access work files when I'm not physically in the office. It's pretty obvious, though, how this could benefit all those people who do need to carry their work with them, at least virtually. Likewise, I'm not that worried about security right now, simply because I'm not working with confidential materials. But it's a good question: is your data safer in the cloud or on a laptop or flash drive that could be lost, stolen, or damaged?
Say, if I decide Mint.com is a safe option, that's cloud banking, isn't it?