While it's best to still use a tool like Truecrypt in conjunction with SugarSync, they do encrypt your data automatically upon upload.
That's meaningless and useless. There is no difference between SugarSync encrypting the data but keeping the keys and SugarSync not encrypting the data at all. In both cases, SugarSync and anyone they authorize, and only SugarSync and anyone they authorize, can access the data.