How to turn off encrypted iPhone backup without a password

Things you can try (that I haven't tried myself), other than hoping it's not an Apple bug:

• If you have a 4 digit lockcode on the iPhone, the encryption on iTunes might share the same password. Try the same pin. Also try older pins, if you change it. It could be an old one.
• Get iPhone Explorer, delete /var/Keychains/Keychains-2.db (may need to jailbreak the phone to be able to see it) on it and restart. Be aware this will clear all your passwords. Now delete your iTunes encrypted backups and re-sync.
• Enter DFU mode, wipe your phone, and sync back - this is an easy way to remove the lock code, not sure about the encrypt iphone check tho. Probably.
• Use some mysterious magic tool, enter in recovery mode to begin with a lot more of hacking. I won't get into much detail here because this isn't a simple procedure. You're on your own. Just wanted to cite it's possible and that maybe even today the "encryption" is quite fake.
• Restore from an old unencrypted backup. Yes, this is the closest step to "wipe".
• As you already suggested, wipe your phone (just for the sake of completeness).

Good luck!

I knew that you need the backup password to get your contacts, photos, videos, etc. I have the same situation before. You can find a tool to unlock the backup password, or go to Google Search: "iPhone Backup Unlocker"