Jon Munday wrote:
But, seems that it can be done ...
http://www.christowles.com/2010/10/how-to-encrypt-vmware-vm-running.html
Just because it can be done doesn't mean it works.
If you "encrypt" a VM, then store the keys on that VM, such that it will boot seamlessly when a thief loads a Windows password reset disk, then all you have is theatre security - encryption for the sake of encryption.