I agree with mgjk but to expand on it a little, USB harddrives are relatively reliable. I have had some last for several years. I have had some fail on me, but then that is true of the primary harddrive inside the computer too.
Any harddrive, indeed any storage medium at all, will have a failure rate. That is why for files that are truly valuable you should have redundant backups, no one solution will be perfectly reliable.
At home I backup my files automatically to my NAS as well as using dropbox for many of my key files (in conjunction with truecrypt for the sensitive ones.) I also occassionally burn a DVD with the files that I know I want to archive for the long term. I would not fully trust any single one of those solutions, but together I know the odds of them all failing at once are acceptably low.
