jason thurber's blog

From the same directory as DataLoader.jar

1. java -cp DataLoader.jar com.salesforce.dataloader.security.EncryptionUtil -g SOMEGARBAGESTRINGFOLLOWS
2. copy that value to key.txt
3. java -cp DataLoader.jar com.salesforce.dataloader.security.EncryptionUtil -e “MYPASSWORD” “/full/path/to/key.txt”
4. copy that value to process-config.xml’s sfdc.password
5. Add <entry key=”process.encryptionKeyFile” value=”/full/path/to/key.txt”></entry> to process-config.xml

Alternately, add sfdc.password, sfdc.username and process.encryptionKeyFile to config.properties (in the same directory).