Encrypt data before sync to dropbox?
No as Dropbox is running as one of your apps and so sees the unencrypted data.

What you can do is create an encrypted disk image in your dropbox area using Disk Utility (or TrueCrypt etc). Dropbox only sees the encrypted image but you have to mount the disk yourself.

there are other cloud services e.g. SpiderOak that say they store encrypted data and don't have the key to decrypt.