In Vista business (and Ultimate) you cannot backup files that have been encrypted using the Encrypted File System (EFS). In Vista Business you have the Backup Computer option in addition to Backup files option. The Backup Computer option takes an image of the hard disk partitions you select including the system drive, and allows you to back up all files, settings and programs, including EFS files.

The only people who can decrypt an EFS file is the person who owns the file (user account name), a nominated (recovery agent) user name, or users given NTFS level permissions. If you want to decrypt your EFS files before migrating the data from XP to a new Vista computer:

To remove EFS from a folder you must be the original user who enabled EFS (or the Recovery Agent) the process is similar. Navigate to the folder, right click and choose properties, advanced and follow the steps above.