Data storage solution advice sought...

Ok, here's my scenario:
-I am creating an application that will work with data extensively
-The data storage solution will come pre-populated with a large amount of
data from me, (about 1 or 2 MB's worth)
-the user is free to modify, and add data. In fact the 'adding of data' is
expected. I would expect the big users to add 1 to 5 more megabytes worth of
data, although I don't want to place any real limit on the user. I could see
someone with a storage card wth a 100MB db if they store images in the
database, as it will allow.
-Replicating with a SQL Server will not be offered as an option as this is
for consumer, not commercial use.
-the ability to back-up the db will be required in some form (xml dump, copy
db file to host machine, etc...)
- I have considered, but have not committed to, developing a desktop version
of teh app for easier input. I am loathe to do this however and, as such,
rate the possibility as low.
-the data stored in the database is relational
- I would like to password protect and encrypt the database. I don't want
anyone using the data I am going to seed the database with.

I see several options: SQl Server CE 2.0 (which is what I am using now in
my development), XML files, Pocket Access, SQL Server 2005 Mobile.

SQL Server CE 2.0: PROS: fastest solution? I'm comfortable with it.
Database can be locked down and encrypted. relational database. CONS: my
main concern is the size of the DB dlls, the fact that only one database can
be opened at a time, and the lack of a clear backup strategy since my
customers will not have SQL server desktop version to replicate to

XML Files: PROS: no storage overhead. CONS: just seems messy. In
addition, I have to deal with image storage and relational data. Just
doesn't seem right to me to use XML files in this case.

Pocket Access - PROS: I understand that I can use ActiveSync wupport to
backup the database. Can I merge a desktop Access database with the Pocket
Access data? CONS: No CF support. I just can't seem to find much about
Pocket Access. I find articles on how to access data - but how is the
database created in the first place? How do I construct a Pocket Access DB?
I have a schema already created in SQL Server and I have data already stored
in it. How do I get this schema and data into a Pocket Access DB?

SQL Server 2005 Mobile - PROs: ? CONS: still in beta (but should be out
by the time I am ready to release). Doesn't seem to solve many of the
problems I have with SQL Server CE 2.0. It does, however, allow more than
one connection to the DB at a time - at least, so I have been told.

My question, after all of that, is so I have my facts straight? and what
would others recommend?

BTW, I am not that concerned over the SQL Server CE overhead. I reckon that
anyone who will purchase my program will have no problem acquiring a storage
card upon which to place their data (I know that this doesn't directly
address the sql dlls). I just think that in the end, it will all even out...
for the market segment that would be interested in my product. So I'm
thinking that this "con" probably isn't a deal-breaker for me. I'm more
concerned about what data backup solution I will be able to provide my users,
especially if they are storing their db file on a storage card and not in
their 'My Documents' folder.

Thanks,
-Neil K.