I find this a bit confusing when I play with it.
I know that when a file goes to FAT volume it loses encryption.
When something is put into encrypted folder it gets/stays encrypted.
I remember seeing somewhere an exception for moving a file within the same
volume.
The resource kit says that if you drag and drop encryption is not automatic
(unencrypted file going into encrypted folder) -- when I do it seems to
encrypt (sp3 applied).
is there a good and simple reference on this?