This MSDN article describes how to ecrypt and password protect a local SQL Server CE database on a WP7 device.
MyDataContext db = new MyDataContext ("Data Source='isostore:/MyDatabase.sdf';Password='mypassword'");
if (!db.DatabaseExists()) db.CreateDatabase();
I’ve not been able to find how to change that password once set. Is this possible? For that matter, is it possible to remove the password and encryption once created?
No, neither is possible, as there is no ADO.NET access, on access via LINQ to SQL – I explore the subject further on my blog here: http://erikej.blogspot.dk/2012/03/windows-phone-local-database-tip.html