> Many file-based products will keep the data protected regardless of the 
> location of the file--however, for this approach to work effectively, many 
> products require the user to manually encrypt-decrypt-re-encrypt each time 
> the file is touched.

Not really. I recently obtained a copy of Pointsec PME, and it
"automatically" encrypts everything that is copied "out" from a
protected computer. So if I copy a file from my laptop, which has PME
installed, to a external USB Flash Drive, the file is automatically
encrypted. I can still use the USB Flash Drive on other computers, but
just can not access the encrypted file. No user intervention required,
and the system is almost transparent.
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