I have used Carbonite for the past 2 yrs and I like it. When my computer crashed 6 months ago, I had several files on Carbonite that were not on my home external hard drives and it worked seemlessly while setting up my new computer.
As you said, for the price it seemed hard to beat.
But - I still keep my critical files backed up on 2 redundant external drives at home. My concern what will happen if Carbonite goes out of business. I do not consider it to be my primary backup. I think of it as a belt to my home drive suspenders. If for example, heaven forbid, there was a fire in my home, Carbonite would serve as offsite backup.
A lot of peace of mind for the price and it is reassuring to know that everything gets backed up pretty much immediately and without me having to touch a key. You get positive reinforcement when you see a small green dot superimposed on every file on your machine.
Only caveat is that it takes a long time to initially backup your files. Talking about weeks here, not hours. But it ran unobtrusively in the background and all went well.
I am pleased with the service.
Randy - yes you can pick and choose which files to b/u. I actually did include my checkbook files (Quicken) because I wanted an offsite backup site.
Yes, selective restore is available, which is what I used when my machine crashed. And yes, you can b/u from externals.
They used to offer a trial period for free which is what I chose. Problem was that the backup took so long initially, that I had to keep hitting them up for an extension of the trial period. It took some doing to get them to agree to extend the trial period, but I explained that I would not subscribe until I was able to play with the service for real and they relented.
In retrospect, I should have just tried the system using a few selected files and not insisted that Carobnite allow me to b/u my entire drive, but they did, I liked it and agreed to the subscription.
Your concerns about securing certain sensitive files are understandable and I suspect that if you search around on the C site, you can get more accurate answers from them. Let's face it though, even if you instruct it to ignore certain files, there is no guarantee that it won't take them anyway either by mistake or by design. Encryption might be your only option to feel totally secure.
I do not keep sensitive data on the machine that C backs up (other than my checkbook software) so I am either less concerned or more naive than you.
I am sure they have all sorts of FAQ's on the various questions you posed.
I've been using Carbonite since about 2006, and I have been happy with the service. It is not my only backup, but just a second layer for peace of mind. All of my photos are stored on a drive which is backed up by Carbonite, but I also have a second drive which I copy to periodically.
When I last looked, they will only backup internal drives; no NAS or USB drives.