This is called obfuscation, but it's pointless. People can still view your complete DOM tree in DOM Inspector or Firebug. As this Yahoo blog entry says, "If you don’t want people to see your programs, unplug your server." This applies equally to HTML.
Don't bother. All encryption will do for you is slow down your site. It's not worth 'hiding' it. Any moron can just open up Firebug and see everything without even having to decrypt the source code anyways.
You can't. If the user can't see it, the browser wouldn't be able to either!
I don't remember how I did it, but I was just reading some of my own code recently and I couldn't even understand it. A normal user would not have a chance. I don't thing encryption was involved however.