The three security levels currently available in CrashPlan+ (which allows use of CrashPlan Central for online backups) are:
- Secure key with account password (default)
- Secure key with private password
- Use custom data key
As for which level(s) to use, it appears that anything but the default meets the goal:
Secure key with account password (default)
The default security level allows CrashPlan admins to access backed-up data without knowing the account password, because the key and the information necessary to unlock it are both stored on CrashPlan servers. This level does not meet the goal.
Secure key with private password (better)
This security level removes CrashPlan's ability to read backed-up data, but the encryption key is still stored on CrashPlan's servers—albeit in a locked state that cannot be used for decryption without the private password. This level meets the goal. In the event that the private password is lost and forgotten, the account and all associated backups must be abandoned; no recovery is possible.
Use custom data key (best)
At this security level, the user is responsible for managing encryption keys. The key is stored on the source computer and (allegedly) never transmitted or stored elsewhere. CrashPlan admins cannot decrypt backed-up data. This level meets the goal, squared. Obviously, keys used for this option should be kept safely backed up themselves; lost keys carry the same consequence as lost private passwords, above.
Information sourced from the CrashPlan encryption key help article; more details are available there.