SECURITY: Best Practices For Handling Connection Strings

I saw a brief blurb on this somewhere and am unable to recall where...

In the context of Security, what are some best practices for
handling -storing, locating, retrieving- database OLEDB connection strings?

I have typically used a single include file and even considered stuffing the
string in a document (XML or otherwise) outside of the root directory. I
know of and have used methods to store connection strings in the registry of
the server. My thinking is the optimal solution involves some form of
encryption and locating the string outside of the site itself. Code: