[Encrypting USB Storage]

Correct. You could encrypt the USB key in advance however and pass the key to the pineapple with the idea being that it would only be persistant for the current session. When working with sensitive client information, there are concerns regarding loss of information and associated risk management implications.

Has anyone used dm-crypt or something similar to set this up?

[Encrypting USB Storage]

Does anyone have any experience encrypting USB storage for the wifi pineapple? I would like to ensure that log files are encrypted for the device to protect captured information.