Three cheers for Time Machine!
A few weeks ago, I discovered (via Disk Utility) that my laptop's hard drive was failing. Modern hard drives have a standardized reporting system (called S.M.A.R.T.) that produces reasonably early warnings about this sort of thing. (I wish Apple made these warnings a bit more obvious, though.)
I wish I could say that Western Digital, the drive manufacturer, made this easy, but they were reasonably quick at shipping the drive to a family member in the US, who then shipped it on to me, here. The replacement operation itself was nearly painless, after a quick trip to the annoying neighborhood hardware store for a set of small screwdrivers.
After installing the new drive, and booting from the Leopard disc, I chose the "Restore from Time Machine" menu item, and 2 or so hours later, I was back up and running... very... slowly... It took another 3 hours for Spotlight to finish indexing the new drive, and an unknown amount of time (while I went to sleep) for Time Machine to update its backup.
This isn't my first "imminent drive failure event", but it's the easiest so far. Time Machine deserves an enormous hunk of credit for this; restoring data from the backups felt like magic. In a couple hours' time, it was as if nothing had changed under-the-hood. It's indescribably impressive how well this "free" application is in these kinds of situations. (I've heard of people using this function for upgrades, as well.)
Beyond that, though, it feels like so much of my data now lives "in the cloud" (email via IMAP or GMail, code in git or subversion, etc.) that astonishing little "lives" on the drive itself now.