The ads for Carbonite make it seem like you can make an exact clone of all the info on your computer and restore it if your hard drive fails so it's like nothing ever happened. Are they exaggerating?
First off, as the developer of a offsite backup method utilized and sold by the company I work for, I may be a bit biased.
Now then.....
Are they exaggerating? I would say so. Short of a bit-by-bit copy of the drive to another drive, which cannot be properly done while using the OS on the source drive, I don't know how you'd make it "like nothing happened." I could see individual files being recovered, but I don't know how they recover things like user profile hives (those files that keep the settings of your profile) when those files are constantly in use by the OS. Now maybe I'm just being picky, but its been my experience that people (my customers) would consider "like nothing happened" to be wildly varying expectations. Does it back up your scheduled tasks? Does it back up your display preferences such as start menu layout, XP/Vista vs Classic mode, etc? Or do they just give you back your files? It's just not clear for a technical person like myself. I also don't like articles calling out their employees for posting positive reviews without identifying themselves as affiliates of the product. Makes it hard to find and trust an unbiased explanation of how their product works.
My biggest question, and one that I would have to sign myself up for their service to answer, is how long do you get before the file cannot be recovered? For example, I delete a file on Friday and don't notice it missing until Monday, is it gone from my backups? Carbonite appears to only give you unlimited space of
one set of data.
If I did use Carbonite, I would be sure to use my own generated encryption key. If you use one provided by Carbonite, they too would obviously have the private key, which makes your privacy worthless if they were hacked, had employee theft, or were tapped by the govt to provide data.
Can you use the backup program that came on XP with a thumb drive to save photos, videos, individual programs and the info on them, and browser info like faves and passwords?
That would be my choice. Everything but passwords is stored in easily portable files in standard locations. I believe there are third-party utilities available to backup autocomplete forms such as passwords for IE. Mozilla should keep them in its normal profile folder along with all your other settings, so it should be easier.
Programs are next to impossible to backup and restore themselves as they integrate tightly with the registry. In the days of DOS-based apps, then sure, it could easily be done. Nowadays, however, its best to keep a copy* of the software in a safe place and backup any saved data files it uses (*.QBW for Quickbooks, etc) to recover once reinstalled.
* if you're legally allowed to make a copy, of course...but that's another story...