http://www.datsi.fi.upm.es/~frosal/
SHC is a program written by the author above that does just that, it's a great little tool to have.
Some have said it isn't exactly encrypting the code but just making it hard to read by obfuscating the code.
There was also a good discussion about that here: http://forums11.itrc.hp.com/service/forums/questionanswer.do?admit=109447626+1302465567943+28353475&threadId=1192978
http://nixcraft.com/shell-scripting/12097-binary-conversion-shell-script-shell-script-compiler.html
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