Admins who are worried about users encrypting corporate data have bigger problems than the little consumer-oriented plug-in that caused Microsoft so much grief last week.
Redmond has pulled the Private Folder plug-in for XP after admins complained it would give users encryption capabilities without offering companies a back door around forgotten passwords and general misconduct. As Phillip Winn at BlogCritics.org points out, users already have a wide assortment of encryption software available to them, all of which poses the same threat as Private Folder.
Shops that truly want or need to worry about users spiriting away data should consider blocking software install rights for end users, which would obviate the risk of encyption add-ons and about a million other naughty bits of software floating around out there. For small shops, that can mean a serious hassle, but it's the cost of serious control over user systems.
And as Winn points out, portable storage devices may well present a greater threat to corporate data than users encrypting files. The harsh reality is that closely controlled data access is painful and expensive -- a solidly crafted and enforced policy is often your best bet.