For this very reason. I use RackSpace and S3 for storage, the encryption occurs locally, so the cloud storage provider cannot get your data. They have free source code so you can validate how it works too. Has never failed on me and saved my data several times with backup and sync. Happy customer
Ehm, no. The patch for this precise issue has been released by MS on July 8 (953230 MS08-037), more than a week ago.