I use Dropbox as well. If you didn't know Dropbox is actually using the Amazon S3 service which feels nice. Regarding encryption I usually make strongly encrypted .dmg archives with Mac OS X containing everything sensetive (anything else, go ahead and hack it

. As others point out, now with the iPhone app its even more convenient.
Also, you start out with 2 GB. Going through some extra steps in the registration and you will be awarded another 250 MB. Then, as a bonus, for each and every referral you will get yet another 250 MB! Invite your friends and family. The maximum of this bonus space was just raised to 8 GB! So all in all you could get 10.5 GB of free space.
When you register make sure to do it with a referral link giving you 250 MB extra space from start. Such as this one:
https://www.dropbox.com/referrals/NTE3NTY3Mzc5