I talked to someone at Palm.
I guess they don't call it a "Hard Reset" any more, but it is true that when you do it, the entire 4-gig hard drive gets reset and all of the data goes away
However, the LifeDrive Manager program allows you to specfy folders on the LD hard drive that will be synced to your PC. Any folders you select are updated on your PC everytime you do a hotsync. So if the worst should happen, the latest files are backed up on your PC.
The program is pretty slick. As long as the LD is connected you can just move/copy files around on the LD hard drive or to/from you PC. (No need to "mount" it.) The LD is still available, and you can run programs on the LD at the same time. You can also mount it in the traditional way as a removable drive on your PC. (Called "Drive Mode".)
But. I would say a backup to a memory card is in order if you travel without a laptop. If you have mission critical files on the LD hard drive, better have a backup to a usb drive. (I have a 1-gig usb drive and do this with important files on my laptop already.)