The Sidekick has been likened to a dumb terminal or "thin client" by Om Malik over at GigaOm. What he's referring to here is that the device is in constant communications with the servers, which actually check for email, grab web pages, and watch for SMS messages. Address books and calendars? They can be stored on the servers. Photos? Ditto. The Sidekick acts mainly as a display device and user interface to that data. Thus, a "thin client."
This cloud-based syncing has been a nice feature for Sidekick users. They could store their data in the cloud so that it's available even if they switch to a different Sidekick.
Any information on those T-Mobile Sidekicks is now gone if the smartphone loses power, if the battery is removed, or if the battery is fully drained. In those instances, the Sidekick would go out to the cloud and try to grab data that no longer exists. Sidekick users who stored their data locally (on the device) or backed up their data on a PC through a sync still have their data and should not be affected, but for those customers who were depending on Danger and Microsoft to keep their data safe, they're in a world of hurt.
How does this relate to iPhone users? Well, most of your data is stored on the local device. In other words, you have a local copy of your address book and calendars on your iPhone, and although you may be syncing with a cloud-based service such as MobileMe or Google Calendars, you're not totally dependent on that service. In fact, you get to test the local storage on the occasions when MobileMe is totally off-line or your device is out of range of a cell tower.
When you sync your iPhone to a Mac or PC, you are backing up all of your data to another location. Any time Apple sends out an iPhone OS update, your device data is totally backed up onto your computer prior to the start of the update. That's what can take so blasted long when you're doing an update.
So are iPhone users safe from any possible data loss due to a failure of cloud services? Probably, especially if you occasionally go in and force a backup of your iPhone to your Mac or PC. How about Mac users who rely on MobileMe for backups of their important data? Well, unless you're also making a backup of your device to an external hard drive or to another offsite backup service such as BackBlaze or Mozy, you could find yourself in a bad situation if your Mac's hard drive decided to fail at the same time as MobileMe.
What the Sidekick incident should point out to anyone using cloud-based services is that they're not fail-proof. These systems are run and administered by human beings, who have a sad record of making poor decisions. The servers are strictly machines, which have an equally poor record of failing when they're needed the most. Those of us at TUAW want to use this as a reminder that you should back up any and all electronic devices on a regular basis. Today it's happening to Sidekick users, but tomorrow it could be you.