EMF allows you to automatically and transparently encrypt your hidden files. Should EMF be uninstalled by someone else, or bypassed using sophisticated disk editing software, the contents of the files would remain encrypted thereby providing no clue as to their contents.
The encryption is totally transparent. You use the files normally. The encryption and decryption of the files is all done automatically in the background as you use the files.
You change this setting by clicking on the E (to remove encryption) or clicking in the E column (to encrypt the folder) on the line of the folder or file you want to make changes to.
We use Microsoft's Encrypting File System to do the encryption work for us. No need to reinvent the wheel, plus they have the resources to keep the encryption strong and up to date. But there are a couple of things you need to keep in mind, especially if you've used Encrypted Magic Folders for Win95/98.
First, Microsoft's EFS only works on NTFS partitions. It will not work on FAT partitions.
Secondly, the password used to encrypt your files depends on your Windows log-in NOT your Magic Folders password. Since the encryption is automatic and transparent you really don't care what password is used, but it is important in one respect. If you login using a password that others use (logging on as a guest user for example) then all others logging in that account could decrypt your files, assuming they could find them, which they can't if Magic Folders is running. If you're concerned about this then click
Start\Settings\Control Panel\Users and Passwords\Advanced\Certificates and check that you have a personal/unique security certificate.
Finally, Microsoft's EFS requires the use of a recovery password to prevent data loss. In other words, the Administrator has a recovery password he can use to recover your encrypted files (once again, assuming they are visible, which they won't be if Magic Folders is running).
WARNING: It is extremely important to backup the EFS recovery key. See EFS Recovery Key Safeguards for details.