Since my primary hard disk is encrypted with FileVault2, I also wanted my backup drive to be encrypted. I plugged in my external drive, brought up Disk Utility, and went to erase/format the disk. I chose Mac OS X Extended (Journaled, Encrptyed). However, I couldn't find out what kind of encryption it uses. Does anyone know (and/or know how I would look this info up via a command or system utility)? Is it the same as FileVault2?
Yes - it's the same (mostly) whole disk encryption where a volume wrapper has key storage to determine if the key or passphrase provided matches and then unlocks the inner drive where all the actual filesystem data is stored. Disk Utility isn't a good way to encrypt an external drive so I usually just wipe the drive and set it for Backups and then tell Time Machine to encrypt these backups. It handles the formatting, generating the crypto keys and lets you choose a passphrase to unlock the keys.
You can use
Here is what a fully encrypted and locked USB drive looks like when you set up Time Machine and instruct it to encrypt backups to an external drive: