ok, so think of it like a penny arcade.  you give the cashier 1 dollar and she gives you 10 tokens, which you can spend in the arcade.  When you leave, you cash in your remaining tokens.   

Bitcoins are send yo the account to get credits and then bitcoins are sent back to client when they cash in their credits.  That is how the coins are used.

Now, i assume (perhaps in error) that the mtgox's and blockchain  of the world have better security than i can privide while allowing me to receive/send bitcoins.

If I do not keep them online anywhere, how does that work?  Do I send all the accumulated coins to my private wallet every hour, and then make a cd backup of that wallet every hour? 

Regardless of how I use the coins, the question is the same:  What is the best way to make an online wallet secure?