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Ah, great to know. Thanks!

Thanks for the explanation, Mike. I had a feeling I might be trading off that convenience for security, which I can live with. I'll be delighted if you come up with an approach to protected folders in the sidebar in future releases.

I'm pleased to have successfully set up Espionage encryption on my Dropbox folder. But I'm now encountering a small inconvenience that I'd love to fix.

I keep my main Dropbox folder and one of its subfolders in my Finder sidebar because of how frequently I need to access files in those folders. It seems that when Espionage locks the Vault folder inside of which the Dropbox folder now sits, the Dropbox folder and its subfolder disappear from my Finder sidebar. If I want them there again, I have to manually add them after I unlock the Vault folder.

I like the idea of those folders disappearing when they are locked. But I would really love it if they could automagically re-appear where they were in the Finder sidebar each time I unlock the Vault folder.

Anyway to accomplish this now? If not, is it a feature you might be able to implement?

That did the trick! Thanks very much. Currently watching Dropbox move all its files to the Vault folder. Presumably all will be smooth sailing from there..

One further question: am I correct to think whatever capacity I give the encrypted folder is counted against my total available disk space on my hard drive? In other words, if I set the capacity to 60 gigs, then that substracts 60 gigs from the available disk space on my hard drive, even if my DropBox folder currently only stores 30 gigs of data. If that is correct, it might be worth mentioning in the instructions, since people might not realize the the limit they pick could affect other aspects of their machine's performance.

I'm following the directions in your Using Espionage with Dropbox blog post but running into a problem each time I try.

When I get to step 5, Adjust Dropbox's Preferences, after I change the Dropbox folder location to the Vault folder which I've set up inside my Home directory, I get an error from Dropbox: "Error with selected folder: Target folder is on a device that does not have enough free space" (screenshot)

The thing is, disk space should not be an issue. My Dropbox folder is 29.32 GB and hard drive has 122.38 GB free space.