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Personally I use removable firewire disks for my backups, because they're reasonably fast (as external disks go) and widely supported. My experiences with eSATA have not been great, but that would be a better option if it was available. With my setup I have up to date copies in three places - on the RAID5 array in my PC, and two external 2TB (striped 1TB) disks, in all cases encrypted with TrueCrypt just to discourage casual browsing. With firewire it takes about 24 hours to do a complete backup, so with USB add ~30% to that time (minimum), and with slower options... don't bother. An incremental backup usually takes about an hour.
What encryption does is means that it is unlikely that a burglar or visitor to my house will be able to copy (or steal) the data off those disks - my bank statements, password collection, all me email, scans of all the random paperwork that the PTB require and so on. It's mildly annoying to be burgled, it's quite inconvenience to have my identity stolen, it would really annoy me to have to start collecting all that data again, and technically if I lose some bits of it I could go to jail (not having my tax records is a criminal offence).
If the PTB want to read the disks it's easy enough for them to do so, they have many options - they can ask for them, they can threaten me to make me hand them over (the most likely option), they can place me under surveillance to obtain the passwords before arresting me, they can plant software or hardware on my PC to capture them, or they can torture them out of me. Plus, they can outsource any of those options.
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