You can use the classes in the System.Security.Cryptography.Xml namespace to encrypt and decrypt an element within an XML document. XML Encryption is a standard way to exchange or store encrypted XML data, without worrying about the data being easily read. For more information about the XML Encryption standard, see the World Wide Web Consortium (W3C) specification for XML Encryption located at http://www.w3.org/TR/xmldsig-core/.

This is appropriate for situations where multiple applications need to share encrypted data or where an application needs to save encrypted data between the times that it runs.

For detail information about Encryption and Decryption of XML elements , please visit MSDN Library.

Exam Related Question:

Only by using an X.509 certificate with Sign and Encrypt protection (D) can the parties
of the message ensure that the message has not only not been tampered with, but that it
can only be read by parties with the appropriate certificate.
Encryption on Web Services that is configurable at runtime is done through Web
Services Enhancements (WSE) 3.0 security in 2.0, thus writing custom code (B) or using
a custom SOAP extension (C) is not the most efficient or correct answer.
Using an X.509 certificate with Sign-Only protection (A), makes a hash of the content,
and ensures at the other end that the message has not been tampered with - but does not
ensure that no-one has read it along the way.