I have a Google account so I would see it as straight forward to use only Google Docs for storage and everything. I have read that Dropbox does not permit uploading of folders which is time consuming. Is Dropbox then redundant with Google Docs? Other programs similar to Dropbox exist as well and I am trying to see what the difference is between categories or if there even is one.
The great thing about Dropbox is that anything in the Dropbox folder is always up to date on your computer, even if you have multiple computers, or are working with multiple people. They do require that everything be in one folder (on Windows 7 it's C:\Users\me\Dropbox\, on OSX its /Users/me/Dropbox/, etc.) but one thing you can do is just use softlinks on OSX/Linux or Junctions on Windows so you can leave your files where they are and just put the link in the Dropbox folder. There are tutorials and tools that make this easier than it sounds - see http://wiki.dropbox.com/ for some good tips.
Google Docs thinks of things differently - your stuff is always "in the cloud" -, which means there is only one copy, so things don't get out of sync, but it also means that you can't get to it if you don't have an internet connection.