Set password in Records.ini
Code:
[Record#]
...
...
Password=Your password
Include records.ini in Setup.dll and set a password for Setup.dll
Set password for Setup.dll in script.iss
Code:
#define PasswordDLL "Your password"
However full encryption is not possible this way. People can still read the password from %temp% folder. You have to use a custom arc.exe to fully encrypt the files (this requires some script editing I guess, not sure).