It looks like Exchange search does not index any emails with password protected xls files, xlsx files are fine and non-password protected xls files are also fine. I have tested this trough OWA and Outlook 2007. I am searching just for the sender display name, or email subject. Anyone else experiencing this issue/ have a work around? Running Exchange 2007 with Rollup hotfix3. Darish.

You mean for any message that has a password protected XLS file, E2K7 is not even indexing the message body?

Yes, thats correct. The message body doesn't seem to get indexed when a password protected xls file is attached. xlsx files work fine. Darish.