The scheme Walker described is called Commercial Software Key Escrow. Each escrow-enabled application would register itself with a data recovery center. Then the key used to encrypt data would itself be encrypted and travel with the data. If the key is lost later, a means to decrypt the key, and then use the key to decrypt the data, is provided through the data recovery center. The center does not store individual keys, but does include a mechanism for recovering the key saved with each file.
Law enforcement can get a the keys by subpoenaing the data recovery center, a public process.
TIS has applied for a patent for this idea, and hopefully, their patent won't be as closely held as other cryptography patents have been. He reported about several contracts SAIC had to test security at remote sites. In each case, they had four days to penetrate the site, but were only allowed to talk on the telephone, not to directly exploit the remote systems. Hackers are quite adept at this type of intelligence gathering. Social engineering, a new name for con jobs, is an ancient human skill, and Walker showed that even non-hackers, without ever visiting the site, dumpster diving, or getting a job as a janitor, could have tremendous success.