Encrypting File System (EFS) and temp files

According to Miscrosoft (How to use Encrypting File System (EFS) with Internet Information Services) the following is/was a best practice:

"Encrypt the Temp folder (%TEMP%) to ensure that the temporary files that are created by various applications are encrypted"

Two questions:

(1) Is this still the case for Windows 7?

(2) If you move the encryption certificate and key off the computer for added security, won't encrypting the Temp folder cause system errors?

As a follow-up, with the Temp folder encrypted I could not install some software today. I had to decrypt the folder to proceed with the installation. Very curious.