American Scientist has an article that (finally!) explains homomorphic encryption in simple enough terms that even I understand.
Homomorphic encryption permits me to send you encrypted data that you can manipulate but never know the contents. You send it back to me, I decrypt it, and see the result. Imagine if a web-based wordprocessor could store your document, edit your document, but never know what your document says. Yes, it sounds crazy but it is theoretically possible. In the last 4 years that theory has been getting closer and closer to reality.
I think sysadmins should read this article to get an idea of what crypto might be like in the future.