this is nothing serious... only a version difference between the ssh-keygen application on ubuntu 6.06 and 7.10.
On 7.10 ssh-keygen by default creates a RSA2 key whereas on 6.06 it still wants the user to decide between RSA1, DSA or RSA2.
I would go with the option rsa or dsa, but not with rsa1.
the script has been updated with this option added to the #--- SSH REMOTE DR COPY ---# section.
The answer to your question "will my backup file be copied to my remote backup server ?" when we have the ssh key generated and copied to the remote host and you have the DR COPY option set to yes. It will 'copy' the newly created archive and the corresponding md5 file to your remote server.
P.S. I found another small bug in this part of the script (yes I fixed it...) Cheers