Last month I highlighted an incident where users lost their data which had been hosted by a Microsoft subsidiary. Now a similar problem has hit Palm OS devices and once more the hosting provider is 'working' with users to assist in recovering their data.
The way I read it, the data is gone forever but the loss to each individual user is far below the entry cost for a lawsuit so the maximum downside for Palm etc. is a PR hit for a couple of weeks then back to business as usual. One day a hosting provider will lose a lawyer's data and then it'll be pass the popcorn while we watch the customers fighting the PR flacks with lawsuits at dawn.
If anyone wants to tell me that the Palm and Danger scenarios weren't technically Cloud Computing then perhaps you can preface your remarks by telling me the difference from a customer's point of view... "I gave you my data and now it's gone. Everything else is irrelevant."