The following article has instructions on how to set the encryption level for your clients. Below is an excerpt.
Setting Encryption Levels
Data encryption can protect your data by encrypting it on the communications link between the client and the Windows XP Professional–based computer. Encryption protects against the risk of unauthorized interception of transmitted data. By default, Remote Desktop sessions are encrypted at the highest level of security available (128-bit). However, some older versions of Terminal Services client software do not support this high level of encryption. If your network contains such “legacy” clients, you can set the encryption level of the connection to send and receive data at the highest encryption level supported by the client.
There are two levels of encryption available:
This level encrypts data sent from the client to the remote computer and from the remote computer to the client by using strong 128-bit encryption. Use this level only if you are sure that your client computer supports 128-bit encryption (for example, if it is running Windows XP Professional). Clients that do not support this level of encryption will not be able to connect.
· Client Compatible
This level encrypts data sent between the client and the remote computer at the maximum key strength supported by the client. Use this level if your client computer does not support 128-bit encryption.
You can set the encryption level of the connection between the client and the remote computer by enabling theSet client connection encryption level Terminal Services Group Policy setting.