The Hacker Project - a free online game

IT says in teh manual:

 Since the file is intercepted directly from the router and the communications are encrypted, the file will also be encrypted with a version equal to the intercepted software version

i interpret this as:

player Y has intercepted player X's file, version 0.25.  player Y therefore needs a decryptor valued at 0.25 or above inorder to use this file.

Am i correct? or does the program file have to be encrypted in the first place for the decryption part to take hold?

Correct, a good hijacker needs good decryption software, as all the files you will hijack are encrypted, regardless of their original state.

Encrypted files cannot be used or moved without being decrypted?

Used no, moved yes.

Okay so if i encrypt a file ( example a virus ) and upload it to a victim, i'm still able to collect profits?

If you upload the virus encrypted you have to use a decryptor before you can install it.
After installation you can encrypt it again, not that it serve any purpose since if it is installed it can't be used in any way...
Only an installed virus will bring in profits.

Does the hijack program only intercept and copy programs of its level and lower, or does a version 0.1 data hijack virus grab all files uploaded to the server?