If you can remove the passcode then the device will sync.
A simple way to force backup encryption a simple way to do this is configure a profile that is signed for your device and that will require a backup password. Disallow removal of the profile.
Also, it would be interesting to see what would happen if the passcode was required through an Exchange or profile policy. Might have to go try.
Also, although mail is backed up it should be protected by a further layer of encryption, however I haven't inspected a backup to see if it stays backed up.
I don't know if the law enforcement toolkit will work on the iPhone 4 yet. Also, it's only available to law enforcement.