I'm tempted by 1password, it would be so convenient. Not clear on how it works. Where is your data stored ... on a server owned by the app developer? How can you be sure it is secure and can't be hacked?
Friendly neighborhood 1Password guy here.
We never store your data in the cloud unless you request it. Note that during creation of the data file there is a checkbox to store in Dropbox (if you have Dropbox). Uncheck that if you don't want to store it there.
We use 128-bit AES encryption in the data file on the Mac right now. The new 1Password 4 data file will be 256-bit AES. Note that the difference in terms of security here is pretty minimal. 128-bit is more than enough given the various tools available to protect the data further. Such as PBKDF2 (we use a variable amount of PBKDF2 iterations depending on CPU power of the device).
It's all outlined in the security document linked above too.
Even if your data is on Dropbox, the master password that is locking your data is never transmitted to Dropbox so a thief would need to have that particular piece of the puzzle to access your data. We all use Dropbox at AgileBits, we wouldn't suggest users use it if we ourselves weren't comfortable with it. The security threat of Dropbox is seriously overhyped these days based on a couple of issues they had. (Everyone forgets the Matt Honan story with iCloud though and thinks iCloud is the savior of all cloud data and Dropbox is the old and busted terrible).
Fact is, we assume the worst when we designed the 1Password data file. What if a cracker gets ahold of your data file? Well, we make sure we do everything we can to prevent them from being able to get your data and you can read more about that here:
http://blog.agilebits.com/2012/07/31/1password-is-ready-for-john-the-ripper/
If you choose a good strong master password that is both easy enough to type and secure enough you will be just fine.
Let me know if you have any questions relating to 1Password. I'd be happy to help though I will stay out of the remainder of the discussion regarding other software, hope you understand. I'm potentially biased on that side and will happily answer technically relevant questions about 1Password only, for that reason.