In the case where the server is has the security options:

Certificate cert= Certificate.CreateFromPfxFile(certificate,password);
SecurityPolicy=new SecurityOptions(SecureProtocol.Ssl3,cert,ConnectionEnd.Server);
SecurityPolicy.VerificationType=CredentialVerification.None;


and the client has the Security Options:

SecurityPolicy=new SecurityOptions(SecureProtocol.None,null,ConnectionEnd.Client);
SecurityPolicy.VerificationType=CredentialVerification.None;

Is the transaction betweent he two encrypted?

In this configuration I'm getting data transfer, but when both are Ssl3 it fails with an AsyncCallback error.

How can you test to ensure that the data being transmitted is encrypted?

I answered my own question.

Excelent program for testing this sort of thing at: http://www.pocketsoap.com/tcptrace/