I looked at this further to determine a work-around. As long as the temp files are unpacked in a RAM drive, as well as the final, unencrypted files, this probably does most of what I need. I think using a newer computer and an OS that encrypts your whole hard drive is a more secure solution than anything 7-zip can do, but you need to figure out the right balance of security for you. (As a disclaimer, I'm not a security expert.) 7-zip has an option in the UI to change the temporary work folder, however,...
Trutter, you bring up some good points. Wiping the temp files wouldn't be a completely secure solution, but it would be better than not. The problem is you don't know in any specific case whether or not it was sufficient. In many cases it could offer protection that it wouldn't otherwise. In other cases, parts of your data would be left. You wouldn't know for sure how much or which. I think a good workaround might be to use a RAM disk, if you could have 7zip put its temp files there. However, is...
I've been looking into this problem, and it appears that WinZip v14 solves this problem...