Recent events surrounding cloud storage/sync provider Dropbox makes you question the security and privacy of the data in the cloud.
Some providers have encryption algorithms built into their product. But for individual users, figuring out how to use them quickly turns into a time-consuming guessing game.
So I have an easier solution. Encrypt the data yourself.
Placing your sensitive data in an encrypted container--a file, basically--lets you store that container on your cloud storage provider of choice with confidence.
This comes with some overhead. Good crypto takes a few CPU cycles. But it's worth your time for the really sensitive information you have out there.
You might not want to bother with encrypting family photos, videos, music or other files that aren't very private, especially if you want to be able to share these files with other users. But if you have your copy of the next big screenplay, your tax information, or other items which are valuable and private in the cloud, you need to employ serious protection.
Today's recommended tool for doing this is TrueCrypt. It allows you to create a file in the size of your choosing to contain your sensitive documents, and encrypt the container using a password (or better, passphrase) of your choosing.
Once created, it goes on the cloud service. When you need to access it, simply mount (open) the container using TrueCrypt and your password/phrase. TrueCrypt will mount the container as a folder or drive on your system. Just place your documents there and you're good to go. Make sure to unmount your container when you're not using it.
For a TrueCrypt walkthrough, check out how to encrypt documents with TrueCrypt.