Hi John. Thanks for the comment. Dropbox transmits the files using SSL and encryption, but they are decrypted at the destination. I’m not sure if they are decrypted when they reach Dropbox’s servers, too, but Dropbox holds your encryption key and can access your data. So they have access to your Dropbox files, and would probably have to comply with a subpoena to turn it over. There also was the Dropbox snafu a while back where they left every account exposed, password-free, for a few hours. There’s been a call for Dropbox to let us store our Dropbox encryption keys locally, but I don’t think they’ve done that yet.
As long as your 1Password file is encrypted with a strong password, it probably isn’t a big deal, but I’d sleep better with either service knowing that my password file wasn’t in someone’s hands, whether in encrypted form or not.