Encrypting a string in Magneto is really really. Magento will use the encryption key specified in the local.xml file:
<?php
$encryptedData = Mage::helper('core')->encrypt("This will be encrypted");
There is one problem that you may encounter that can be a little bit problematic but there is an easy work around. The encryption process will strip out non-printing characters or character it does not recognise. Easiest way to get about this is to base64 encode what you are about to encrypt:
<?php
$encryptedData = Mage::helper('core')->encrypt(base64_encode("\n\rI start with a carriage return"));
Decrypting is just as easy:
<?php
$decyptedData = Mage::helper('core')->decrypt($encryptedData);
Remember to base64_decode after decryption if you did base64 encode before encryption:
<?php
$decyptedData = base64_decode(Mage::helper('core')->decrypt($encryptedData));