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Tarsnap can see your keys. They generate them, and use them. Of course, this is local, and you can check source, to see what's going on. Good luck with the code review, fellow tinfoil hats.
<http://www.tarsnap.com/security.html>

Also, Tarsnap does in fact look at your data, to do it's compression. Similarly, it's local, and you have the source.
<http://www.tarsnap.com/efficiency.html>

It seems like Tarsnap is basically just a server-stored tar CLI. Not sure advantages you get for this over hosted SVN, Git, or similar. You still have to do your own scheduling, hotcopy, merging, restoration.

On the flips side, their are many more complete services with the the same claims. Mozy is extremely popular.
<http://alternativeto.net/software/tarsnap/>