There is no doubt that banks have been hit hard by today's economic conditions. Some banks have been hit harder than others but only a handful will actually fail. Regulators do a good job watching over underperforming banks and are quick to arrange marriages between healthy and weak banks.
In the few but very visible cases when a bank does fail, depositors are protected through the FDIC. This article outlines FDIC insurance, how they are protected and to what limits...
By: Greg Arbues, Founder of Client Advocate Network Information gathered from the FDIC