This question I asked over a year ago in the MS social forums, with the answer being that by design it is not possible. I still wonder whether one could hack around this limitation, without using BitLocker.
The question comes down to this: you have two user profiles on one PC with encrypted offline files, and both need to access the same offline files share. Problem: the user who caches the share first, encrypts the files with its own key, so the other user cannot decrypt those files, even if he has the private key of the other user.
Suppose you have a share \\server\tools
Suppose you want to use offline files on \\laptop for \\server\tools share.
Suppose you have two users X and Y.
Suppose X makes \\server\tools offline available.
Suppose X encrypts his offline files.
Suppose Y tries to make \\server\tools offline available.
Problem: Y can do this, and the files do seem as if they are available offline, but they cannot be read. Presumably because the cached files are encrypted by user X. In online-mode everything works fine and user Y can read files from \\server\tools.
Tried solution based on what worked on XP machines:
One possibility is to let the system-account encrypt the whole CSC folder.
One rather easy way I found is to log in under SYSTEM account and encrypt the files. Here is the procedure:
Disable Offline Files through the Sync Center. --This way we assure the CSC-files are not used. Restart the computer.
Now we need to create a service which wil run under SYSTEM account and give us access to CMD so we can run cipher. So open CMD as administrator and run the following command:
sc create cmdsvc binpath= "cmd /K start" type= own type= interact sc start cmdsvc
CMD, because it is no service, will apparently fail to start, but you will get a popup window from "Interactive Services Detection" saying that it is trying to display a message. Click “View the message”. By doing so you will switch the desktop to the SYSTEM environment running CMD.
Now type in the CMD:
cipher /e /s:”W:\CSC” --assuming the CSC folder is in W:\CSC
This will encrypt all the files in the CSC folder with the SYSTEM encryption key. When run you could also run cipher /w:”W:\CSC” which will remove data from available unused disk space.
Type exit and revert back to your desktop environment. Enable Offline Files and reboot your computer.
Now your Offline Files are encrypted with the system encryption key. In XP this would work, but under Windows 7 the Offline Files service will not start. In the event log I find "The Offline Files service terminated with the following error: The system cannot find the path specified."