I have my .bitcoin folder set to sync with Ubuntu One.
Is this a vialbe backup method?
Is this a safe thing to do?

Yeah, but ecryptfs is the right thing to replace your encfs proposal.

You could use ecryptfs, which is used by default for encrypted home directories in Ubuntu. Thus it will have perfect support with updates.

apt-get install cryptsetup

You can make a livecd with custom packages such as truecrypt preinstalled. Look into Ubuntu Customization Kit for an easy way to do it, at least if you already have Ubuntu installed somewhere.

Note: be very, very careful when using a livecd for these purposes. Everything you write "to disk" while running the OS off a cd will get erased when you shut down the computer! One way to use such a cd would be to have both Dropbox and Truecrypt installed and store the wallet in an encrypted container on Dropbox. Again, exercise caution when setting your system up. It's very easy to do something silly and lose a lot of coins. At the very least, whatever you do, test your setup thoroughly, reboots and all, before sending any significant amount of coins to the secure wallet. Also, back the wallet up elsewhere than Dropbox as well.

Edit: BTW, if you store the block index on Dropbox as well, you won't need to re-verify the whole thing. You still have to re-download the file of course, but in my experience it's still faster than waiting for the client to verify everything. You might want to store the index on an encrypted volume as well, I'm not sure what kind of attacks are possible if someone manages to tamper with your index, but better safe than sorry...

As mentioned by others, simply splitting the wallet, or even an encrypted volume or archive containing the wallet, is not secure. An attacker does not need a whole wallet file to steal from you. All they is a whole private key to an individual address (or enough of it that they can brute force the missing piece) to steal any coins received by that address. With the OP's method, chances are an attacker could steal most if not all of your coins with only one flash drive and your password.

the cloud is where the future is - steve jobs says so. why don't all the things bitcoins do go to the cloud?

Noob question:

I have a Macbook Pro, is a Linux VM installation in Parallels secure enough?

Great post, thanks for the ideas
I will try the ec2 option, and send you my donation from there (-:

A liveUSB has some problems: someone could modify the distro on your stick so as to look perfectly normal but steal your password / wallet. No one would do that? Well, if your whole life savings are in bitcoin it's absolutely worth it doing that!

A liveCD is safer in that regard (just sign the CD-R and check your signature). Reboot and you start from scratch. Sure, you will have to download the whole blockchain from scratch every time, but if your intended use is a savings account, that's a viable option.

Thiago - How can I use a Linux UI on EC2? Do I need VNC?

LiveUSB makes a whole lot more sense to me.

Do not use Ubuntu 11.04 with NVidia cards! The poclbm.py/python process will consume all of your CPU for nothing. This behavior does not exist in Ubuntu 10.10.

The poclbm in Ubuntu 10.10 does not consume 100% of CPU, but Xorg does if you try to use the mining machine as a daily Desktop...  

cd ~

sudo add-apt-repository ppa:stretch/bitcoin
sudo apt-get update
sudo apt-get install python-pyopencl subversion git-core bitcoin

svn checkout http://svn.json-rpc.org/trunk/python-jsonrpc
cd ~/python-jsonrpc/
sudo python setup.py install
cd ~

mkdir ~/.bitcoin
echo "rpcuser=user" > .bitcoin/bitcoin.conf
echo "rpcpassword=password" >> .bitcoin/bitcoin.conf

bitcoin -server &

git clone https://github.com/m0mchil/poclbm.git
cd ~/poclbm
python poclbm.py -d 0 --user user --pass password

bitcoin -server &

bitcoind -daemon

sudo apt-get update
sudo apt-get upgrade

cd ~/poclbm
git pull

cd ~/python-jsonrpc/
svn up
# If there is a new version:
sudo python setup.py install
cd ~