While poking around my MacBook the other day, I was very surprised to discover that while DevonThink encrypts text entries, images and other attached media are not. I thought that an encrypted database encrypted everything! For anyone who is interested, I put together a short article explaining how to put the data on an encrypted disk image and automatically mount it when you want to run the application. It is actually written in the context of Journler, which I was evaluating when I discovered the problem, but applies equally well to DevonThink.
DEVONthink has never claimed that it encrypts the contents of a database when you use a password. It just doesn’t allow the database to be opened without entering a correct password.
Your strategy of using an encrypted disk image is the one we have recommended in the past. I do this myself and find it very convenient because it allows transparent access to files in the database using the “Launch in Finder” contextual menu item when necessary.
There have been requests of encrypting individual entries in the past as well and this may be something we could look at in the future.
You are correct, and I misspoke. Password protection is not the same as encryption.