User can invoke EFS features through Windows Explorer or by using
a command-line utility called cipher.exe. To use
Windows Explorer to encrypt file, open File property window by right
clicking on file name. Click Advanced... button -
Advanced Attributes dialog will be opened allowing you to mark file
as encrypted.

Before saving new settings Windows will prompt user to encrypt file
only or the whole folder. It address very important issue - while
the file itself could be perfectly protected, the application which
opens the file may create a temporary copies of the file while working
with the document. The example is Microsoft Word. When user opens
encrypted document, EFS decrypts it transparently for Word. Then during
the work, Word creates temporary hidden file where it automatically
saves the document in the process of editing and deletes it on the
exit. This hidden file presents a real breach in security because
it contains user data in plain (not encrypted) form. Encrypting the
whole folder instead of file only solves this problem.
