For stuff I consider sensitive -- medical documents, password lists, financials and the like, I store on a truecrypt partition of the external drive that I use for backups. Since I use OS X most often, this drive is a Time Machine drive, but with a chunk of space partitioned off for TrueCrypt. I opted to use a partition because it's less obvious than a container on the filesystem. I use TC's deniable filesystem trick as well, and padded the "duress volume" with things like "hacking" documents that might be plausible.
I also have an old 80GB laptop hard drive, which is fully-encrypted with a truecrypt volume, which I occasionally back up to from my primary TC volume. This drive is stored in a secure location off-site, in the hands of a trusted individual. They do not, however, have the passphrase to the volume.
The goal in all of this is so that I don't carry sensitive data with me. None of the encrypted stuff is anything I could possibly need RIGHT THIS SECOND. This means that my sensitive information is only at risk of being exposed when I'm at home and when I actually am accessing it.