I was running around the technical sites this morning, and ran across this little "Goodie".... for those who need Government Grade Secure Data Storage.... Looks like just the thing for that situation.... small, light, USB, and VERY Secure, both physically and electronically... ThinkGeek :: Ironkey Military Strength Flash Drives
I use truecrypt on my USB Drives. I do not use the entire drive, just create a file that get's mounted with truecrypt. Until it's mounted, it looks just like any file on the drive.
Truecrypt here as well. 16 GB flash drive filled with 10s of thousands of misc pictures and one that looks like a .jpg but is my mountable TC drive. They are all roughly the same size.
Another vote for Truecrypt. I don't like the idea of 10 tries and it dies. Good two-way encryption doesn't require the death of the device.