I am trying to complete the instructions described here https://en.bitcoin.it/wiki/Securing_your_wallet#Windows . I have already done the Truecrypt part and installed the Bitcoin client. But i have one question i need help with before i can continue. Do i delete the Bitcoin folder & data directory in Appdata after i copy it onto an encrypted drive ? Or does it need to remain there to function even though it would then also be in the encrypted drive if not deleted ?
Make sure to delete wallet.dat - that's the only file with sensitive information. (You might want to run a utility such as unix shred on it to make sure it's really deleted).
Just a warning - before deleting, rename the file, and try to copy it from your backup and see if everything works.