I signed up for Carbonite last year, and while starting the backup, I discovered (hidden in a FAQ file on their web site) that they only backed up the drives organic to the computer (ie-the "C" drive, and and second drive in the computer case itself, if you had one), and NOT any external (USB or Firewire) drives. This was a significant problem, since I kept program files on the "C" drive, and all data files on various external drives.
Needless to say, I was not happy, and cancelled my subscription. I bought a 1.5GB Firewire drive to back up the entire computer, and keep it in a fireproof safe. Problem is, I have been sorely lacking in the disclipline to actually drag it out and do the routine back ups. (This is where the on-line option really shines, since it keeps you backed up real-time, all the time). I would rather pay for an on-line service (even if over two years or so I could have purchased an external HD) and know that the data is always backed up. Hard drives fail too.
Having said this, I believe that Carbonate had plans to expand their back-up options to include external drives. I simply don't know if that has been done yet, and my experience is 1 year stale.