Recently, Lev Bolotin of Clevx gave me a production sample of a USB token with a keypad on it. It's a pretty neat idea for certain uses. My immediate thought went to BitLocker in Windows Vista. You can store the BitLocker key on a USB stick, but you cannot prevent anyone who gets their hands on the USB stick from stealing the key. Nor can you require a PIN and the USB stick to unlock your drive. With Lev's stick, however, you can put a PIN on the USB stick itself. Unless you enter the PIN on the device before sticking it into the computer the stick won't give up the BitLocker key. In other words, you finally get the option for both a USB stick and a PIN to unlock your BitLocker volumes.
I also like IronKey as a safe and secure USB stick. IronKey also permits multiple volumes, something that Clevx' technology currently does not have. In other words, IronKey lets you have one encrypted volume and one unencrypted one, both on the same stick. However, IronKey requires software installed on your computer to access the encrypted volume. This precludes its use to provide a second factor for BitLocker because the BitLocker key has to be available prior to booting the operating system, and IronKey's software cannot run unless the operating system is running. If you put your BitLocker key on the IronKey it must be on the unencrypted partition.
Clevx's PIN technology is currently available from Corsair in the Flash Padlock product.
More on BitLocker is available in Byron Hynes excellent TechNet Magazine article. I still run BitLocker on all my Vista computers.