My company is going to be storing sensitive data for our customers, and will be encrypting data using one of the managed .NET encryption algorithm classes. Most of the work is d
Your best bet is to physically secure the hardware the key is on. Also, don't ever write it to disk - find some way to prevent that section of memory from being paged to disk. When encrypting/decrypting the key needs to be loaded into memory, and with unsecure hardware there's always this venue of attack.
There are, like you said, hardware encryption devices but they don't scale - all encryption/decryption passes through the chip.