harddrive with its own back up software. It backs up my files at a preset time each day. Since you don't want a hard drive sitting around, I don't think it's really needed. For me, it's nice too have both; but I am a one person operation. So, I don't worry about the HD sitting around.
I use Carbonite as my cloud backup. I prefer Carbonite because I can click on the specific folders that I want it to backup. It monitors in the background and when you save a file, it immediately queues it up for a back up. It does not interfere with the rest of the computer. Since I do a lot of computer work from 9am-Noon (with more appointments in the afternoon), I have set Carbonite to hold off on backing up between 9-12, just to make sure there is no interference. I have Carbonite app on my iPhone, iPad, desktop and laptop so I can access the back up copies from any other them. I spend about $90 per year for Carbonite to backup my desktop and the Seagate HD, described above.
Carbonite also has a Mirror feature that will keep a Mirror image of everything on your computer. But, you need a separate HD for it. I have not used it. But, a IT tech used it to seamlessly replace my desktop hard drive.
Dropbox is nice, but you need to set up a new Dropbox folder and slide your data storage folders into it. I did not want to worry about that, especially for actual program features. WIth that said, I also have Dropbox on my machines since it is a great way to save a file on one machine, and make it instantly available to the others.