Whether that's true depends, to a great degree, on the environment and the threats that you're defending against.

I work in a secure, guarded building and have to swipe a card just to get to my desk. The odds that anyone else will EVER see me type a password are small. If I write down all of my passwords on a piece of paper that's kept in a locked desk drawer, the risk to the organization is minimal. There's no harm in forcing me to have an absurdly long password that's changed often, as I don't NEED to remember it.

On the other hand, a front-desk secretary doesn't have a private space. We need to ensure that his/her password is easy to remember and rarely changed so that the secretary is NEVER tempted to write it down.

(Personally, I use Keyring for PalmOS. You need to have the device and you need to know my keyring password to get anything else.)

First, don't forget physical security. Assume that someone WILL attempt to steal your netbook. Keep it in sight or locked up. Encrypt as much as you can (whole hard drive if at all possible). Make backups, even if that's just "webmail and flickr/picasa", to keep data loss to a minimum.

That said, I'd keep it simple. Get everything for your online banking set up before you go. Take a look at the certificates. Don't worry too much, but just know whether your bank's certificate has the name of your bank or the name of some parent company. Really, you want to know if something changes later.

Seriously consider two browsers: one for "safe" targeted work (checking bank balance, for example) and one for "browsing". Personally, I'd use Firefox for the safe stuff and Opera for everything else. The Opera Turbo http://www.opera.com/browser/turbo/ feature is really nice for slow or flaky connections.

Like most people, I have a small amount of truly irreplaceable content (documents, pictures) and a whole bunch of "it'd be annoying if I lost that" content (music, movies). One of the really convenient things about this split: the truly irreplaceable stuff is not very large. My docs and pictures occupy about 15 GB, and most of that is pictures.

I have an external hard drive where I back up everything at least nightly. This protects me from accidental deletions and a failed hard drive. It doesn't protect against fire or theft, though.

Services like Mozy and Carbonite offer off-site backup for about $5/month (there are many others -- these are the two best known, I think). I could string together something with a spare drive and a friend, but frankly, it would take a year or two before that approach matched the cost of Mozy et al., and frankly, I just don't WANT to worry about this crap. I'll pay the $60/year to make it someone else's problem.

One interesting option: Crash Plan at http://www4.crashplan.com/consumer/index.html . They offer free backups to friends' machines, and paid backups to their own fileservers. Sounds like the best of both worlds, but I haven't gotten around to trying it yet.