Is there a zip libary which will zip and unzip, with password protection ?
Try Objective-ZIP. Simple to use, works on Mac OS X and iOS, and has support for password-protected ZIP archives. It's also pretty efficient.
EDIT: The google code link is a 404 now. I think this is the new URL for the same project: https://github.com/flyingdolphinstudio/Objective-Zip
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