If you use OS X 10.5 or above then the cost of Time Machine is the cost of an external hard drive. Not only that, but the interface is dead simple to use. Open the folder you wish to recover, click on the time machine icon, and browse the directory as if it was 1999 all over again!
I haven't tried to encrypt it, but I imagine you could use truecrypt.
Yes this answer was posted quite some time after the question was asked, however I believe it should help those who stumble across this posting in the future (like I did).
