If you have been paying attention to the HIPAA rules or if you have been reading this site, you are aware of two facts:
(1) You need to back up your data
(2) Your ePHI data, including the backups, need to be encrypted
Fortunately Windows 7 (Ultimate or Enterprise) and Max OSX (Lion or Snow Leopard with a special module) can encrypt your external USB drive for you easily. Not that for Windows 7 you MUST have Ultimate or Enterprise for this to work.
If you are running Mac OSX Snow Leopard the free modules can be downloaded from here for free. Instructions are linked. If you have running Lion you already have all you need.
For Windows users, insert your USB drive, open up My Computer, Right-click on the flash drive you want to encrypt and select "Turn on BitLocker". From there just follow the prompts to enter a password and get it all set up.
For Mac OSX users, open up Disk Utility under Applications/Utilities, select the partition, click the Erase tab and where it asks for Format, choose "Mac OS Extended (Journaled, Encrypted)", click the Erase button and follow the prompts.
In either case, when the format is done, the drive is now encrypted with AES-256, FIPS-140-2 level encryption. When you next put them into the machine, you will be automatically asked for the password. That's all there is to it!