I keep all of my work and personal data on a Truecrypt volume on a separate hdd to the OS (W7) As far as I can see this covers my obligations under the data protection acts in the UK and I can display due diligence if there is any data relating to my clients that is leaked online or whatever.
I know it has been shelved and that the tinfoil hat wearers are all concerned about it but for my purposes it does the job. Also means that none of my data is stored on any servers outside the UK and I am not held ransom by the usual mega corporations when they decide to change or bugger up their systems.
Any UK government agency that wants to see what I have got on my disk only needs to ask, any agency outside the UK can go fuck itself, I am not in their jurisdiction.
Edit: Also forgot to add (before I get castigated by a lot of people who presume to know my affairs better than me ) that all of this data is backed up on separate external drives, same encryption, at least 1 jumbo jet width apart. Anything bigger than that which lands on my house will make any back up redundant anyway !