You are doing user-space filesystem encryption. You want to use a more recent version of EncFS than the one provided in the Ubuntu 8.04 repositories. No problem, just compile one yourself.
The most recent version in the EncFS will not compile on Ubuntu 8.04. Version r53 12/7/09 configure.ac breaks with:
checking whether xattr interface takes additional options... no
./configure: line 24466: syntax error near unexpected token 'newline'
          This issue has been reported to the EncFS maintainer, in the interim, you can compile a fairly recent version by following the steps below.
Get the build tools
sudo apt-get install build-essential autoconf automake1.9 libtool gettext \
                     cvs pkg-config
          Verify the kernel has FUSE support
cat /proc/filesystems | grep fuse
          you should see something like this:
nodev   fuse
        fuseblk
nodev   fusectl
          Install EncFS dependencies
sudo apt-get install libboost-dev libboost-filesystem-dev \
                     libboost-serialization-dev libfuse-dev \
                     fuse-utils librlog-dev libssl-dev
          Build version SVN r50 (f97ae2780) by pulling down with git and checking out the most recent version that will compile on Ubuntu 8.04
    cd ~/src
    git-svn clone --no-metadata  http://encfs.googlecode.com/svn/trunk encfs
    cd encfs
    git checkout -b work_around_build f97ae2780
    autoreconf -if
    ./configure
    make
    sudo make prefix=/usr install
          Done!
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