SQL Server 2005 provides encryption as a new feature to protect data against the attacks of hackers. Hackers may be able to get hold of the database or tables, but they wouldn’t understand the data or be able to use it. It is very important to encrypt crucial security related data when stored in the database, as well while transmitting across a network between the client and the server.
Read my complete article here : Introduction to SQL Server Encryption and Symmetric Key Encryption Tutorial
Reference : Pinal Dave (http://blog.SQLAuthority.com)