The DLP industry is adding encryption capabilities to their offering: http://www.darkreading.com/document.asp?doc_id=156738&WT.svl=news1_1

I have long been a proponent of adding encryption to sensitive information. I do believe the best approach is to not only enable encryption, but also enable digital rights management to sensitive documents as you would then have a much fuller control of the document lifecycle.

Furthermore, DLP should be used in conjunction with a retention policy in the business, and become part of the overall information management of the organization. A tighter integration into storage systems for retention is the next logical step.