Data encryption can increase data security. Data encryption is the process of converting unencrypted data (clear text) encrypted data (cipher text). Click the following link to learn more about encryption and decryption.
With the help of Encrypting File System (EFS) you can store encrypted files on NTFS partitions, thus adding more security to your data. Encrypting File System (EFS) encryption is at the file-system level and herefore, the encryption and decryption process is transparent to the user. If a folder is encrypted, every file inside the folder will also be encrypted. A user with the proper key can transparently decrypt encrypted files, but a user without the proper key cannot decrypt the encrypted data. Data Recovery Agent (DRA) can decryot the encrypted data, if the user is not available. Encrypted files are protected even from those who gain physical access to the computer where the files are kept. If the user doesn't possess the key, they receive an "Access denied" error message.
New Windows Server 2003 Encrypting File System (EFS) features are listed below.
1) Encrypted files are listed in green color for indentification.
2) Encryption support for offline folders.
3) More security and easy recovery.