The Doghouse: Lexar JumpDrives
If you read Lexar's documentation, their JumpDrive Secure product is secure. "If lost or stolen, you can rest assured that what you've saved there remains there with 256-bit AES encryption." Sounds good, but security professionals are an untrusting sort. @Stake decided to check. They found that "the password can be observed in memory or read directly from the device, without evidence of tampering." Even worse: the password "is stored in an XOR encrypted form and can be read directly from the device without any authentication."
The moral of the story: don't trust magic security words like "256-bit AES." The devil is in the details, and it's easy to screw up security.
Although screwing it up this badly is impressive.