Multibit security with regards to "backup" folders
The files with the .cipher suffix are the regular wallets encrypted with 256 bit AES.

The password used is the one you use to first encrypt your wallet. MultiBit goes through all the unencrypted wallets, creates an encrypted copy and secure deletes the unencrypted one.

You can open the .cipher wallets using File | Open wallet and it asks you for the password.