Non escrowed encryption is used in web browsers such as the popular Netscape and Internet Explorer. When active on a browser such as Netscape, a blue line appears at the top and the broken key icon in the bottom left hand corner becomes a regular key. Yes, a word document can be encrypted by Word itself, and may then be transmitted over the net. In defiance of the proposed law, the New York Times is offering a web based encryption service utilizing a mild form of steganography in a Java program called 'Mimicry'. The New York Times article makes an interesting point.
Mimicry transmits plain text messages that make sense to the reader, even if the story is nonsense.
The story produced from encryption has nothing to do with the original message. Indeed, one can offer many arguments as to why a gov't would be better off without encryption being held by it's citizens. Just think what a different world we would live in if Early American crypto had not been possible. Not only does the proposed law trash the fourth amendment which protects us from illegal searches and seizures, but also steps on free speech. Judge Shoob granted a preliminary injunction in favor of first amendment protections for this encryption enabled process known as remailers.