I have some PHP source code that I\'m hosting with hosting company XYZ. I\'m using a PHP encryption software like Zend Guard or ionCube to protect the source from being view
As far as I know, PHP encoders do not actually encode you PHP code. They just change variable names and add unnecessary rubbish code, so that it becames VERY hard for anyone to find out, what the code does. The problem is that they cannot hide any password (be it the hard coded admin password, or the database connection data).
So they do not ensure that your code is safe, they just make it very hard for anyone to understand it.