Error: sqlceexception- Operating system does not support encryption

I installed flypaper (Windows XP SP2), restarted my computer, and started the program. The prgram came up with a checking for updates screen. The screen goes for a while then I get a sqlceexception which says the operating system does not support encryption. See below for screen print of error. I have uninstalled and reinstalled twice now with the same results.



Thank you for your help,
Kyle