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Any thought on whether or not this is Rails3 compatible? Any work being done to make it so?
It's probably not Rails 3 compatible. We're not using it ourselves anymore so we have no stake in maintaining it. If you want it to be Rails 3 compatible please feel free to submit a patch.
There is now a Rails 3 version here: https://github.com/twoism-dev/encrypted_cookie_store
That looks good but it would be great if you can make it both Rails 2 and Rails 3 compatible.