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From MSSQLTips.com]
I recently accepted the challenge of designing a database for an employee application, and the first thought to cross my mind was," I will need to encrypt at least one piece of data". Along with SQL Server 2005 came the native ability to encrypt data in the database. Prior versions depended on third-party tools or encryption via the front end application. In this four-tip series we will cover the objects needed and steps required to encrypt data using SQL Server 2005:
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http://www.mssqltips.com/tip.asp?tip=1312