Hey Jo!
Although we wanted to, we did not include an application template for Entourage because of a bug in it associated with how it stores its emails for Spotlight.
Essentially, while there's no problem at all encrypting the Entourage database located here:
~/Documents/Microsoft User Data/Office 2008 Identities/your identity
There is a problem with its Spotlight data which it stores here:
~/Library/Caches/Metadata/Microsoft/Entourage
That folder contains Spotlight-readable versions of all of your Entourage email so that you can search for it in Spotlight. If you don't care about that ability then you can go right ahead and encrypt your entourage database and disable its Spotlight support in the preferences.
If you try to encrypt Entourage's metadata folder, Entourage will ignore it and will not update it as new emails arrive. We *have* contacted Microsoft's Mac Business unit about this problem a while ago, and they replied to us saying that they would look into the issue, but so far I don't think they've done anything about it. Please feel free to contact them though and let the know they should fix it!
To answer your other question, yes, it would be backed up encrypted. Though again, we encourage you to also make use of Espionage's built-in backups because they make restoring a folder easy.