Answer :
U can encrypt files only on NTFS5 volume. If U move/copy the files to
FAT32/16, NTFS4, shared folder then U loose the encryption. U can encrypt
files if U havn`t compressed folder - U must decide encrypted files or
compress files.

Paul



If you have a file on an NTFS volume that is encrypted (with EFS) and
you transfer it to a fat32 partition what happens?  What happens if
you copy the EFS file from one NTFS volume to another?  I am going to
guess that in the 1st case it decrypts the file (not sure).  I am
pretty sure that in the 2nd case it retains the encryption.  Can
anyone quickly verify?  I don't have a fat32 partition to test on. 
In the meantime I will try out the 2nd scenario and you are welcome
to mail me off-list if you are curious (unless someone answers it on
list).

Thanks guys (and ladies of course).

Cheers,

Leon

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