Whidbey will be introducing a new class, SecureString, that helps to make this all easier for you. SecureStrings are held in encrypted memory by the CLR (using DPAPI), and are only unencrypted when they are accessed. This limits the amount of time that your string is in plaintext for an attacker to see. Since SecureString uses DPAPI to help secure your data, it's not available on Windows 98, ME, or Windows 2000 with anything less than service pack 3.
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