I do, to an extent, but I think I am in the minority in that respect. I use Gmail, Google Calendar, Remember the Milk, Plaxo, and Freshbooks to manage my email, calendar, tasks, contacts, and timekeeping and billing. I even use Google Docs for drafting forms and some documents, although rarely for specific clients.
While the cloud lacks the secure feeling of having my own data in my own office, the cloud offerings I use are backed up more often (sometimes near-constantly) and more securely than I could ever manage on my own. I do, however, sync all my cloud information locally so I have a backup copy if I ever need it.
The only time I regret relying on the cloud is when I follow my wife to a small town where the hotels still do not have internet access. But in such cases, a pen and paper usually works just fine until I am back in range.
Do You Trust the Cloud? | Lifehacker