I've actually had more flash drives fail than external HDDs. I've now had three SanDisk Cruzers fail (2GB, 1GB and an old 256 MB) and had a WD 160 GB Passport external drive fail as well. Fail here means corrupted data and inability to format successfully again, so not just garden variety data corruption. SanDisk does replace the failed flash drives, but the data is lost. Costco replaced the errant WD drive as it is easier than dealing with WD. No one can (or should) replace the false sense of security from trusting any single storage method!

Thus, don't put absolute faith in flash disks. I back up critical files (client or investor presentations) to flash disk, external HDD and burned CD now.