USB drives are notoriously unreliable. To use only USB drives for backups is enormously risky.
Dropbox is great... for synchronizing files. I use Dropbox to synchronize files between my two computers, and to make my files available on my iPad and iPhone.
I'm concerned about using Dropbox as the sole backup system, and here's why. A few months ago, the disk on which I store my writing died. While I was trying to sort that out, I did something (but I don't know what) that led Dropbox to conclude that I'd deleted all of my files. Dropbox (being focused on synchronization, not backup and restore) dutifully "deleted" its copy of my files from its server.
Then I made another mistake: I ran to my other computer (which had copies of all my files), and tried to restore from there. But Dropbox (being enormously dutiful) said, "Hey, Dale deleted all these files from one computer. I'd better delete them from this one, too!" And it started deleting the files from my second computer. I was able to disconnect Dropbox before it had done much damage, but some damage had been done.
Now, in addition to storing the current state of your files, Dropbox also stores earlier versions of those files. If you accidentally delete a file, Dropbox makes it easy to retrieve the file. But I had "lost" more than 10,000 files, and Dropbox offers no easy way to restore huge numbers of files.
I don't mean any of this to be a knock on Dropbox. For one thing, I made several mistakes that led to the disaster. But (you'll have to trust me on this) I'm a reasonably smart dude, and the mistakes I made were not obviously boneheaded. For another thing, Dropbox is terrific for synchronizing files. For its intended purpose, Dropbox is fast, reliable, and painless.
It is not (yet) great for backup, but that's because Dropbox was not designed for backup. Until Dropbox adds features specifically designed for backup and restoration, it is only moderately safe for those purposes.
So... my backup system consists of several layers.
Source code control. I use a tool called Git to take frequent snapshots of each writing project. I can easily roll a project back to any earlier moment. Git is a pretty darned geeky tool, designed primarily to manage code for software developers. I recommend it highly, but only for folks who are comfortable with esoteric, geeky command line tools. There are other tools that are more user-friendly, such as TortoiseSVN for Windows. But even that is technically quirky enough to befuddle most non-geeks.
But Git (the way I use it for my writing projects) stores its copies on the same disk as my writing project. If that disk dies, I lose both the current files and the earlier versions. So...
Local backup. I use a built-in Mac tool called Time Machine to make backups to an external disk every hour. These are "incremental" backups, which means that it copies only the files that have changed since the last backup. Time Machine allows you to look at the state of your computer at any time in the past, and restore files, folders, or whole disks to any given moment. For Windows users, numerous similar tools are available (though I can't make any recommendations there).
But my external disk sits beside my computer. If some physical disaster hits my room (flood, earthquake, puppy), I could lose both my computer and the external disk. So...
Offsite backup. I use a service called JungleDisk to back up my files "to the cloud" every night. My files are copied to an external data center (in my case, one of Amazon's data centers). The initial backup can take a long time (perhaps days, depending on your connection speed and the number of files you want to back up). But once the initial backup is done, the nightly incremental backups take about five minutes. JungleDisk/Amazon charge based on how much data you store and how much you transfer each month. My monthly bill runs between $2 and $3 per month. About the cost of four paperback books per year.
But this "cloud-based" offsite backup is on the same planet as my computer. If some disaster hits Earth... Well, I'll live with that. Or not.