On HDD media, scratches and other pallet based errors usually just effect the individual files/directories rather than the entire disk (actually for me, it was this way only on Linux; on Windows, the directories with affected files/directories were barely browsable). Normally for backups I would store each file in several different places (either physical media and/or buildings) along with some kind of checksum to verify the validity of the file.
Software: I'm with Edoode in that I highly recommend TrueCrypt for secure encryption of data on any media. In the case of DVDs, you can simply make a several Gig file which acts as the mountable encrypted Volume.
As to your last question, I personally would not trust DVDs as a long term backup solution. However, if you must, then I would recommend that you write at least 2 copies (one with you, and one in another safe area) each of which contain the volume file(s) and volume checksum(s) in the root directory. As the volume contains all your backup data in an encrypted form, the single checksum for the entire volume will suffice to ensure the validity of all data contained within. One last note: I would highly recommend that you confirm that the burn was successful either via your burning software or verify the checksum. And as with all encryptions, your data is only as secure as your password.