Problem Configuring Password Property For Oledb Connection.

I'm creating an xml configuration file to hold the connection string including the password (sql server authentication).  My package protection level is set to 'EncryptSensitiveWithPassword'.  I set up my connection manager and I check the 'Save my password' box. The  'Test connection' button reports that the connection is OK.  I enable the package configurations and I go through the Package Configuration Wizard and I specify 'xml configuration file' and I choose 'Specify configurations settings directly' and I specify a configuration file name with the same directory as the package.  I check the 'ConnectionString' property and the 'Password' property and then click 'Close'.  Then I save my package changes.  Now I look at the xml configuration file in a text editor and I see the Password property has an empty element:

<ConfiguredValue></ConfiguredValue>

Is it supposed to be empty?  When I right-click the package in solution explorer and pick 'Reload with upgrade' then I have to enter the password, but the validation fails with 'Acquire connection' error.  Should I just be saving the 'Connection string' property, or should I save all the connection elements (i.e. ServerName, UserName, Password etc.)?  If I edit the xml configuration file and I type the password into the <ConfiguredValue> element above, and then I do 'Reload with upgrade', then the 'Acquire connection' validation error goes away.  Could this mean that I am not able to encrypt the password?  Thanks.