1 I didn't think you were kidding.  I'm still trying to figure out if the iCloud is secure or if I should continue backing up to my computer... LOL!

2 My advice - if you have a computer backup for your system that is working... keep backing up your i-device to your computer.  At the moment iCloud does not offer a way to back up to both your desktop and iCloud at the same time.  At this point it's not the security that is at issue, it's the reliability of iCloud that has not been proven over time. 

If you think you can remember to do it (aka give yourself periodic reminders) you can backup to iCloud and periodically plug in and do a manual backup to your own computer... but how many people remember to do that? 

Add to this you only get 5GB free storage and that may be the deal breaker for many right now.  I'm in wait and see mode for much of these changes.

3 Seriously...the only way to save your stuff is to back it up to a device that you can unplug or unload, and put in your pocket, and walk away with it. Might have to put it in your "pack", but at least you've got it.  I would never depend on the "Cloud", whatever the flavor...also, 5 GB is nothing. You put your stuff out there, and someone / sometime will read it.

The only people who remember to do backups, are the ones that have lost everything before. Kinda like experiencing a house fire.

If people believe their data is "secure" in the "Cloud", they're crazy. Once you put it out there, it's there forever.

If people can't remember to do local backups, they shouldn't have a computer. Just schedule 'em for the middle of the night might work, ya think?

Just sayin'.

4 Well, the way to really backup well is the 3-2-1 rule.  The data must live in 3 places. Two of those places must be off the main computer and one of those places must be offsite.  So, you would have

-- your original data on your computer. 
-- a backup hard drive that lives on your desktop or closet
-- an offsite backup either to an encrypted cloud storage or a hard drive you have moved to someplace like a bank, or your office or a friend's place.

One copy is not a backup - hard drives fail far too easily and so do CD burns and that kind of thing.  The local backup copy is there for ease of use - it's right there... but if your house burns down or someone breaks in and steals your stuff or if there's a tornado, flood, what have you... that last backup offsite is your insurance that you can get your data back. 

Most good backup services offer you the ability to encrypt your data before it's ever uploaded.  They also tell you if you lose your password, you won't be getting your data back because they can not decrypt it for you.  I use Crash Plan - I like them.