When you set the password for the .PST file, did you close Outlook and re-open it before attempting to open the .PST and test the password? Outlook seems to save a .PST file password for the session that it is open, even if you close and re-open the file itself. If you close Outlook, then it will prompt for the password the next time you try to access that file.



Basically it goes like this:
Open Outlook. Open PST file (or access the PST file in the Navigation pane if it is already open). Enter password for PST file. Now as long as Outlook is open, every time you access that PST (even if you close and open it), you will not have to re-enter the password. Once you close Outlook, then the next time you try to access the PST file it will prompt for the password.

If you are not being prompted for the password after closing and re-opening Outlook, then there's definitely something wrong with the program on your system.

Hope this helps.

-SW

ok, i tried that and it works but it is not doing exactly what i wanted. when I close outlook and reopen, it automatically asks for the password for the protected folder without even trying to access that folder. I click cancel because I don't want to folder visible unless I'm on the pc. it comes up again asking for the password. i click cancel again and it goes away. Now, if i try to access the folder it says "the set of folders cannot be opened. the server is not available. contact your administrator if the problem persists." Now, in order for me to open the folder i have to close outlook and reopen it and then it immediately asks for the password again. So basically, the only way I can have the folder locked for me is to hit cancel twice as before and when I want to access it i have to close and reopen outlook. This is pretty dumb, any way around this or is there a fix for this? I have windows XP and office 2010. Also when the folder is locked it is collapsed in the navigation pane so I cannot tell if there is email waiting or not. Any way to keep it expanded?

EDIT: I just noticed that with the folder locked, it is not forwarding my emails to the locked folders. It comes up and says error in set rules. I have the rules set for all emails coming from my gmail account to be moved into my personal folder. It will not do this unless the folder is unlocked. How do I fix this?