Can I use an HFS+ usb disk with encryption enabled with a Time Capsule (2TB is mine)

Solution 1:

As far as I can tell from reading Apple documentation and other users' experience (I don't own a Time Capsule myself) you can't use encrypted HFS+ drives.

According to http://support.apple.com/kb/HT2426 Time Capsule only supports HFS+, HFS+ with journaling, FAT16 and FAT32, which would rule out encrypted HFS+:

The AirPort Extreme (802.11n) and Time Capsule support USB storage devices that are formatted as Mac OS Extended (HFS-plus), FAT16, or FAT32. Formatting a storage device as Mac OS Extended with journaling is recommended, as it may provide some more resilience if the device is removed or powered down while in use. Note: ExFAT and NTFS formats aren't supported.

If encrypted HFS+ were supported Airport Utility would provide some means for entering the password to decrypt the attached harddrive. The password would then be used by NetBSD, which is the underlying OS that exports the disks contents over the network, to mount the drive. This doesn't seem to be implemente yet.

Maybe someone actually owning a Time Capsule can test it and chime in.

Solution 2:

With OS X Mountain Lion, you assign encryption after the backup volume is selected. Once the location is chosen, use the System Settings in the Time Machine config to set your passcode (the encryption key is created from this) to encrypt the backup data. So, the drive is not encrypted the Time Machine data IS encrypted.