While it's possible to encrypt data stored in SQL Server, a problem that frequently comes up in an application is that data needs to be encrypted before it's passed to the database. For example, at the company I work for, we use a simmilar CLR procedure to do this so that the web server which is located outside of our datacenter can encrypt sensitive data and send it to the middle tier program which then saves the encrypted value to the database. This way the data doesn't need to be decrypted and then re-encrypted in the middle tier program, since the programs and database are now using the same algorithm.