I had a chance to install iPhone OS 3.0 beta that Apple just released today. and turns out you can encrypt your backups. I don't think this was mentioned anywhere, but here it is a screenshot from my Mac:
iTunes take a backup of your iPhone each time you sync with your computer. Some people did not necessarily feel comfortable with this since if you had sensitive data on your iPhone, now it's also on your computer which may easily be stolen; this is especially the case if you use a laptop or just because malware is a common threat nowadays. But no more worries, right?
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