FYI.... Encryption requires NW6.5 SP2. Also, I haven't used encryption in production environments, just some basic testing.. It appears that the encryption is transparent to the end user. So if you have rights to the file system, you will be able to see the files. As Thelad pointed out, you need to take precautions to secure your workstations.
Here are some details from novell documentation:
On the first activation after a system reboot, you must enter a valid password. When the volume is activated, NSS loads the volume's persistent data from the Volume Data Block. If the Encrypted attribute is enabled for a volume, NSS searches in memory for a known key in the list of volume names and keys. If the key is present, it is used. If no key is present, NSS consults the list of volumes and passwords. If a password is available, it is used to unwrap the key from the persistent data and the new key is placed in the list of volumes and keys. The password is eliminated from memory.
Note this portion: >>> After the encrypted volume is activated, all encryption operations on user data are transparent to file system applications that use normal file I/O functions.<<<
Data written to files is held in cache until such time as it would be normally written. At physical write time, the data is encrypted to a temporary write buffer and written to the volume in encrypted format.
During reads, the cache is consulted, as it would normally be, to determine if a requested block is already in memory. If the requested data block is in cache, the clear-text data is transferred. If it is not, a physical read request is made, with the read directed to a temporary buffer. After read completion, but before control is returned to the calling program, the encrypted data in the temporary buffer is decrypted into a cache buffer. The read proceeds normally, with clear-text data being made available to all future requestors.
Marvin Huffaker, MCNE
