Protecting Folders
To protect a folder, simply drag it onto the Espionage application, or onto the folder list in the main window. You will then be presented with the following sheet:
Choose Encryption: AES-128 provides strong encryption and allows for faster access to files than AES-256, but for those who need even strong encryption, AES-256 offers that option. Sparseimages will save you several megabytes of disk space for small folders and can be opened on systems prior to 10.5, but you should choose sparsebundles if you expect the folder to grow over 25 megabytes in size, as these are easier to backup.
Application Associations: If you're encrypting a folder that contains application data, you should drag that application onto this box. Learn more about application associations.
Important: You should always encrypt folders unless you have a very good reason not to.
Learn more about unencrypted, password protected folders