If you've heard of
Microsoft Private Folder 1.0, forget it. As of 2:30 p.m. Pacific Time on Friday, it no longer exists.
Microsoft quietly added the free encryption utility earlier this month, and then just as quietly deleted it. The utility allowed users to encrypt and
store files inside a private folder.
"Private Folder 1.0 was designed as a benefit for customers running genuine Windows," a Microsoft spokesperson said in a statement. "However, we received feedback about concerns around manageability,
data recovery and encryption, and based on that feedback we are removing the application."
from
http://www.pcmag.com/article2/0,1895,1989425,00.asp
looks like it only works on xp, and was removed because of bad performance or other issues.