Lion is still pretty new and Lion Server is still very buggy. Enabling encrypted backups is risky, and could lead to significant dataloss if you're not careful and test everything thoroughly and regularly (especially after system patches or changes).

TEST everything, including Booting from your Recovery partition, booting from your TM backup disk (that doesn't work for me) and from your las chance unencrypted backup disk (a monthly superduper/ccc disk that's kept safe and unencrypted).

I'm running Lion Server with latest patches, firmware password and every volume encrypted including 3 Time Machine disks, which I'll be undoing after I save this posting.

I rotate through multiple TM disks regularly to ensure a corrupted time machine volume only impacts a week or two of data (learned from several Leopard and Snow Leopard corrupted TM volumes). I recently had to wipe a TM disk with a year worth of backups due to significant volume issues. Luckily I had other volumes.


I also recently found that you can use multiple encr TM volumes (meaning switching active TM disks) but you CANNOT browse them (holding option and click the TM icon in the menu bar).

If you switch TM disks, it appears to remove (at least for my 2 volumes) the ability to browse other previous TM encrypted backups and claims no previous backups when you select the disk in sys preferences. The directories and data are there, just can't use the gui to get to them. THIS IS REALLY BAD. I'm filing a bug with apple later today.

I've also run into issues with Recovery Partition Boot (doesn't work, after significant effort I got the USB Recovery to boot but not the recovery on the encrypted disk. I was unable to unlock any of the encrypted volumes, something prevents it from accepting my password, after 20 attempts, it was clear I wasn't mistyping. I didn't try the recovery key though.

So BE AWARE OF THE RISK OF LOSING EVERYTHING if you're caught off guard with encrypted boot disks, firmware passwords and all encrypted backups. SAVE YOUR RECOVERY KEY to a non-connected device.

I agree that having unencrypted backups will expose your confidential data to anyone with access to it, if your TM disk *and* computer are stolen, then there was no point enabling encryption in the first.

I am glad though that it's there, I just think it's too easy to enable, and very very hard/impossible to recover.

good luck!