As you probably already know, AIR 1.5 is now available. New features include database encryption, Flash Player 10 support, and an updated version of WebKit.
I updated my Salesbuilder sample application to leverage the AIR 1.5 capabilities. Salesbuilder 1.5 leverages the new database encryption feature to allow you to secure your local database.
The first time you start Salesbuilder, the application will generate the encrypted database on your local file system. Salesbuilder implements the key generation approach described in the section Using encryption with SQL databases in the manual Developing Adobe AIR Applications. The encryption key is based on a password provided by you and a SALT generated by the system.
You can install the new version and download the source code here.
A basic script explaining how to use the application is available here.