If you want to backup the directory while it is still encrypted (not mounted), look for encfs.
But I prefer luks myself (uses dm-crypt).
I see, looking at all of these, it looks like luks uses built-in modules and tools whereas the others need fuse or something like it. The luks option looks most integrated and there is a nice page in the wiki on it:)
The data size is only a few megs, so I can create the file backed block device and let that get backed up, I will only mount it when I need it, then unmount it.
Thanks everyone! jlc