Admin, I have slept since then!
If I remember the thread, we did not actually come up with a solution at that time because there was no encryption scheme available to do that. However, if you are running Vista from what I understand is those files are in fact hidden and people have been having problems with Hoster not being able to catalog the files. Sounds bad but actually can be a help. If you set Hoster.exe to run in administrator mode then it should be able to catalog the files. Then you set your KJ up with a logon that doesn't have administrator rights and they will not be able to see or copy the files.
Admin, will this new system still allow burning CDs from KMA files?