Some USB drives (SanDisk, Lexar, Kingston, IronKey) have hardware encryption built in, but when it comes to encryption, I prefer to stay away from proprietary implementations.
Well, the Ironkey is proprietary of course. However, after Steve’s interview with Ironkey’s CEO I was very curious how the thing would actually work. For my daily needs Ironkey’s level of security is more than I need anyway. And I’m not a big fan of conspiracy theories. Ironkey is very likely not a subsidiary of the NSA. And should I ever be concerned about some government agency breaking into it, I can still encrypt the data on my Ironkey with PGP. Call me paranoid but actually I run a copy on the Ironkey and use it to encrypt the hundreds of entries in my master passwords file.