QUOTE(hellokeith @ Nov 12 2006, 03:20)

Copy protection has nothing to do with file-level passwords or encryption. And tunneling/transmission level encryption requires alot of setup, especially when firewalls and NAT are involved.
Password protection is a simple copy-protection - in case someone copied your precious file while you've been transmitting it over the network, he will be unable to open it without a password. If you want to secure your communications, then transport layer security is the right answer (as cabbagerat already said).
QUOTE(hellokeith @ Nov 12 2006, 03:20)

If the security was embedded into the flac encoder/decoder, then lossless wav output would always be available for copying and converting to other formats.
Quite the contrary: if the security was embedded into the flac encoder/decoder, then lossless wav output will NOT be available for copying and converting to other formats.