We recently published an update on this story here.
After numerous service interruptions during the past week, on Sunday afternoon T-Mobile informed owners of the Sidekick smartphone that user data, which is stored in Microsoft/Danger's servers could have been lost for good. By design, the T-Mobile Sidekick doesn't store much of its user data on the device itself, but uses the cloud for storing address book information, photos, calendar and application downloads. And while service outages are still commonplace in today's cloud-based services, this could be one of the most high-profile data loss occurrences in recent history.
Reportedly, the data loss was caused by a failed upgrade to Danger's storage area network, only to discover later that no backup was available. Microsoft's involvement only aggravates the issue (they acquired Danger in 2008). Undoubtedly, this will come as a complete blow to Microsoft's image, both as a cloud service provider (see Azure) and to its mobile platform division, having just recently announced the Windows Phone initiative.
An official follow-up statement is expected Monday regarding the status of the potential backups. In the meantime, T-Mobile is alerting its affected customers (number not disclosed), letting them know they shouldn't remove the Sidekick's battery, reset the devices or let them lose power. Syncing with a desktop application should be a safe measure to be taken at this point if your Sidekick has some info on it.