Brian Burton@neil I like gocryptfs for this kind of thing. You create an encrypted folder, then mount it in its unencrypted form in another folder. Encryption is seamless once mounted, and backups work fine, even block based delta backups, because the encrypted files are just files.
@neil I guess it doesn't match your request perfectly because it's not "just" an individually encrypted file it's a type of virtual filesystem, but the result is individually encrypted files and I think the user experience works in the same spirit as you described.