You will need the latest version from the mediafire link (1.6.7.5) : http://www.mediafire.com/download/aflylbhblrzpz0h
There are two ways to encrypt files, but first, you'll want to setup your client.
Go in Tools > GRF Encryption
Put your encryption password in the first box (you can save the credentials to a .grfkey format if you plan on using the encryption often, but make sure this file is not shared with anyone else).
Select your client executable (the name of the executable cannot be changed afterwards).
Put your new cps.dll name. This cannot exceed 7 characters. You can simply leave it as "cps.dll", which won't require an edited client.
Click on Generate files. If everything went well, a window should show up with your new cps.dll file selected (and the client, if it needed modifications).
Screenshot below after you generate your client files.
Copy the new generated files to your client folder.
That's it for the client configuration.
As for the GRF actual encryption now... Open your GRF in GRF Editor. If you want to encrypt your entire GRF, go in Tools > GRF Encryption, click on Encrypt GRF (might ask you for your password). The process should be rather quick, the output GRF is your new encrypted GRF.
You can also encrypt specific files if you want : right-click the items you want to encrypt and use Encryption > Encrypt. Save your GRF.
Encrypted files will show in orange. When opening up an encrypted GRF, GRF Editor will prompt you for your credentials (hence why it's useful to save your password somewhere, then you can quickly load it with Key... > Load recent > your key.grfkey) :
To make encrypted Thor patches, create a new Thor file from File > New > New Thor. Add a data folder and add your files in there. This is the same process as above : right-click, Encryption > Encrypt. Make sure you use the same password/key. Go in the Container options tab and set your target GRF (as shown below). Once saving, you will no longer be able to modify your encrypted Thor patch though (the files will become unreadable). Also, always test your Thor patches to make sure everything is working fine.
That should cover most of it xD! If you have further questions, go ahead.