I still use a floppy for the following reasons. One, I have my HD set up on an onboard RAID controller (as a single drive) and XP requires a floppy present during setup. Two, I use an ancient program (MS Works 4.5) for keeping track of a number of items, via its database function. I don't want those files residing on my system, even though it's behind a firewall and they're protected via Winzip passwords. Three, I "support" a number of friends and relatives, some w/ older machines, and a floppy is an easy way to transport files.
That said, I'm getting a lot of use out of three thumbdrives that I have (16MB and 64MB Lexar JumpDrives, 256MB Lexar JumpDrive 2.0 Pro). But, those "friends and relatives" machines I mentioned typically don't have USB ports, and if they do, they're still running Win98, and then I have to fool w/ USB drivers.