Does Android version 2.2 locally encrypt Activesync messages?

I am a sysadmin for company X. They are interested in allowing ActiveSync access to devices that support local offline encryption of the downloaded attachments and email data.

Considering how the iPhone encrypts local data, where you need to have a 3GS phone or newer with the latest IOS, and click a configuration setting... what offline security provisions are in the Android phone?

I want to prevent a situation where a user can steal an Android phone, and copy off the non-encrypted data.

Question

How can I ensure that ActiveSync data downloaded locally to the device is protected?
Is there anything specific to version 2.2 that applies?

Local copies of emails are NOT encrypted, however it does use ssl to send and receive from the exchange server. Also as PMGoldstein said it allows you to wipe devices remotely. Here is a link to the current issue on the android request board for this feature, it states that it is currently not available in Froyo 2.2. I have also personally tested if data on the phone such as emails are encrypted and they are not. Here is another link to the droid pro apparently it will allow full device encryption in the first quarter of 2011. I'm not sure if this is due to a software update (2.3) or some feature from Motorola. I did find quite a few other sites on Google that will back this up. However the Motorola site did not have anything specific about this feature just that it will enable "advanced" IT security policies.

I'm not sure how local data is stored and would suspect it's not encrypted, however similar to the Blackberry standard, Android phones connected via Activesync can have their Exchange data remotely wiped via server command.