What are the risks of using Strongcoin.com as an online wallet? Strongcoin claims it is &quot;The Safest way to store your Bitcoins. The only Bitcoin e-wallet service that's not vulnerable to security breaches. Your Bitcoin keys are encrypted in the browser.&quot;
As I understand it, with their system your private keys are essentially encrypted by your browser before they are sent to the website. They also appear to have a method of creating an encrypted paper copy of your wallet so you can restore your wallet if the website disappears.
Even so, it seems you're still potentially vulnerable if you access your wallet from an infected computer (i.e. through keystroke loggers and more advanced logging techniques).
What other risks are there in using such a service?
Note: I have not used Strongcoin, and have no affiliation with them in any way.
I am the operator of My Wallet which is a similar javascript based wallet service. I will try and keep this answer as impartial as possible.

The Website Owner is Malicious 

The website operator is free to change the javascript code at any time so if they are so inclined can change the code to uploaded your unencrypted keys or intercept your password. If you do not trust the site owner it is therefore not recommended you use such a service.

The website database is leaked 

Assuming the site has been programmed correctly in the event of a database leak only your encrypted keys will be leaked. The attacker maybe able to brute force your password if it is not secure enough, but as long as users are made aware of the leak they will have enough time to move their coins to new addresses.

The website server is compromised

In the event of a full server breach the attacker may be able to alter the javascript code or website code to send him an unencrypted copy of the keys next time you login. This type of attack is generally less common than database leaks and to have any significant effect would need to go unnoticed by the site operator.

You forget your password

As your password is never sent to the server the site owner cannot offer a password recovery procedure. In the event of a lost password your key(s) will be unusable. Paper wallet backups can help with this.

Key logger or virus 

If you have a key logger or virus on your computer it is possible to that it could intercept your password which the attacker can then use to login to your wallet and spend your coins. Traditional desktop wallets are also vulnerable to this. My Wallet is less vulnerable to this as the site supports yubikey two factor authentication.

One final note: Using My Wallet you can add your Bitcoin address only without the associated private key. If you then keep a paper wallet backup of your private key even in the event your account is compromised there is nothing to steal.