Just published the below advisory describing an issue with Mail.app
and a solution. I comment on the flaw on my blog:
http://enablesecurity.com/2008/10/03/apple-mailapp-security-advisory/

An up to date version of the advisory can be found:
http://resources.enablesecurity.com/advisories/apple-mailapp-smime.txt

The advisory was first published on EnableSecurity Newsletter. If
you'd like to subscribe then send an email to
newsletter@enablesecurity.com


.....
Apple's Mail.app stores your S/MIME encrypted emails in clear text

Date published: 2008-10-03

Affected version: 3.5 (929.4/929.2)

Unaffected version: Unknown

Summary:

Apple Mail.app does not store S/MIME encrypted emails securely in the
Drafts directory on server.

Impact:

The assumption that the server does not have access to the email
content is violated.

Description:

Apple's Mail.app is the default email application that comes with Mac
OS X machines. It supports S/MIME as standard for encryption and
authentication of emails.  However by default Mail.app also has an
option called "Store draft messages on the server" when you are making
use of an IMAP or Exchange server.

The assumption when making use of S/MIME is that no one except you and
the recipient of the email can view your encrypted email - end to end
encryption. Emails are stored in encrypted form on the server and
therefore should not be read by anyone having access to the email
server, thus preventing Man in the Mirity
attacks. What the "Store draft messages on the server" option does is
store a clear text version of the email, until the email is sent.

The problem with this option is that it defies the assumption that the
email is encrypted on the server. This can therefore lead to a false
sense of security and information leakage, which is exactly what
people making use of S/MIME want to prevent.


Solution:

Go to the Preferences and select the account from the accounts tab
Select the "Mailbox behaviors" tab
Uncheck the option "Store draft messages on the server"

Finally, make use of a UPS or similar technology to prevent loosing
your unsaved emails in case of a power interruption or failure.
Mozilla's Thunderbird on Mac OS X is not vulnerable by encrypting the
drafts before they are sent to server. This may also be a way to
mitigate this issue without sacrificing usage of the "Drafts" folder.

Timeline:

Aug 14, 2008: Initial email to Apple's security contact
product-security@apple.com
Aug 15, 2008: Was assigned a follow-up id and the security team asked
me for more information.
Aug 17, 2008: Provided full information and explained that this
security issue defies the assumption that with S/MIME email is stored
securely on the server.
Sep 11, 2008: Sent a follow-up email to the Apple security team
without any response
Sep 16, 2008: Another attempt to contact the Apple security team.
Sep 19, 2008: Received a response from Apple letting me know that: "A
complete solution for the issue may involve significant architectural
changes, so at this time it's difficult to estimate the timeframe or
release vehicle for a fix."

DISCLAIMER

The information in this advisory is provided by EnableSecurity as a
courtesy and without any representations or warranties.  Recipients
are advised to conduct their own investigation and due diligence
before relying on its contents.