An aggravating situation with a simple solution. I have a brand new out-of-the-box Windows 2008 server that will not maintain a terminal services RDP session for a lousy two minutes without a “Because of an error in data encryption, this session will end.” error. Rather annoying however I did find a solution to the problem so follow along:
1) Show All Connections
2) Local Area Connection -> Properties
3) Press The Configure Button (for the NIC)
5) Then Set The following To Disabled: Offload TCP Large Send or IPv4 Large Send Offload (HP)
When Large Send Offload is enabled on a NIC the NIC will handle frame processing rather than the CPU. If disabling it fixes the issue and also improved performance there may be a problem with either the hardware or network topology and you should consider running NIC diagnostics. This solution may also resolve issues after installing Hyper-V or Virtual PC 2007 on a Windows 2008 server.