That specifically is referring to scheduling the log files to be zipped with the encrypt option selected on it. Having the folder encrypted via EFS so that the files that are in it could be the first step, or choosing to log to a DB instead of flat files is another potential option where you can encrypt the db and the connection to the DB. I am also in the same boat as kstone, where I haven't tried the encrypt folder option at least for security auditing purposes so I also can't comment on the effectiveness of it as that type of tool. I think the real question comes down to the security requirements you have as to whether something like EFS or a tool Bitlocker is sufficient or the DB option could work as well. Logging to file is basically logging a flat file. There isn't a native option to add additional encryption built into KSS for a straight log to file option until you zip the files.
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