According to this article on CNET and some other posts I have seen around the Internet, Microsoft released a product called Private Folder that allows you to encrypt the contents of a folder with a password. I am not sure it is such a good idea. There are a few problems that I see with it. The first is that it is not supported by Microsoft. If I loose the password or if there is a bug how do I get back the files that are most likely the most important ones on my machine. The second thing is that with the encrypting file system I can get the same functionality on XP Pro so why do I want to add an additional product. The third issue I see is that I am not sure that it is well behaved. What I mean by that is that if I encrypt the folder that contains the data files for SQL server will SQL Server know how to decrypt the data before it tries to read it.

Having said all of that, I do think that we need to look at how to encrypt data and make sure that when a laptop, backup tape, or some other storage medium is lost or stolen that data is not available.

[July 17, 2006]
I just saw another article stating that Microsoft has pulled the product over concerns from enterprise customers over how maintainable this product would have been. I think it is very responsible of Microsoft to do that, but you would think with all the "smart guys" they have working for them they would have thought of this before releasing the product.