Right, so they always used to say they did not have access to the keys that data was encrypted with, but then admitted that they could access the data if they had to (i.e. they had the keys). Then they accidentally left the whole setup open after a botched software upgrade, allowing anyone to access any other user’s account and files.
So, not exactly good.
Smart money says encrypt files yourself before putting on the service, but this does limit you if you want to access a truecrypt volume through your iPhone.
Spideroak is [apparently] better, but I haven’t really used it in anger.