I still have and use my first $49 256mb sandisk. Never had any issues. I now use a 8g U3 sandisk daily for 100% of my tasks. I live on portable apps.
The closest thing to an issue is I have noticed the total storage size has decreased a tiny bit, but this is supposed to be normal. After all with my email client alone I am doing 1000's of overrights and stuff.
Another thing is to always remember to eject the device properly. I have had corruption of files that way, but never any damage to the drive. I backup weekly.
Flash drives are a god send. I cant imagine carrying around compact disks anymore.