USB drives become fragmented very quickly with continual writing, and do not perform as well over time as a standard hard drive.
They also have a physical limit on the number of accesses though that's not an effective limitation but might come into play for very long-term storage.
I'm sorry for your loss bro, but thank you for mentioning it. Because you just might have saved me from the same issue. I'm backing up all my pics and files as we speak.
The whole external hard drive/USB backup is pretty outdated. You have to worry about keeping the data syncronized with your pc, otherwise you're in the same situation with your data only on one drive. I HIGHLY recommend using cloud storage, many options are free, with additional storage usually starting at $5 per month. These options are backed up by their providers and are far more reliable. Another key advantage is that information can be accessed from any internet connected device securely. Some good options are Google Drive, Microsoft Skydrive, Box.com, and there are many others.
"Outdated" is a matter of perspective. I can access my WD set-up (that's in my apartment) via any internet connected device - it's really my own private cloud. It's really a matter of do you want a back-up (which by definition is snapshot in time) or do you instant access to data you just created. Two different scenarios with multiple different scenarios as a solution.
Cloud storage is an answer for both scenarios, and it can be free. I was just trying to respond with a simple free solution that offers more than an external hard drive. I'm guessing most of the users here are not going to be setting up a NAS device or leaving a pc on 24/7 with attached storage.
Cloud storage isn't for the paranoid however. I don't consider myself paranoid, but I'm not ready to take that plunge. Then again, I have a fairly robust configuration at my house. What's missing is an offsite storage, so a natural disaster that wipes out my entire house would be... problematic. But I'm fairly well protected from a single component failure. Years ago I used to work for a software company that sold backup software. Even today the cost of backing up your data is far lower than the cost of losing your data. I went through this years ago (thus the mirrored configuration I run now) and the drive I sent to the recovery center turned out to have hard crashed. Meaning it wasn't just a mechanical or electrical issue, the heads had cratered the plate, destroying any possibility of recovering the data. It cost me $100 just to get that bad news.
That was the best advice given: Ship the disk to a company that is specialized in forensics if you really want to get your personal data back.
I guess I'm ultra anal then. I backup "My Documents" to a second internal drive once a week. Once a month "Libraries" gets backed up to an external drive that sits on top of the computer, and another that goes in the safe, and a third that I keep at work. All are encrypted with TrueCrypt. Don't trust the security of the cloud storage, although I guess an encrypted file container could be uploaded safely.