> rc4.EncryptionKey = "1234567890";

Your key better doesn't get any more complex than that. Here's the code the encyption library uses:

// Perform the conversion of the encryption key from unicode to ansi
byte[] asciiBytes = Encoding.Convert(unicode,ascii,unicode.GetBytes(this.m_sEncryptionKey));

I don't understand why you still see this over and over and over in .NET applications. Using a DOS compatible ASCII codepage in a Windows application and in claim to use ANSI in the comment. ASCII != ANSI, please....

What code page is your computer using? The .NET code breaks when you use an Asian codepage that support multibyte characters. The code uses Encoding.GetChars and Encoding.GetBytes as if those are reversible operations. They are, but only with Western codepages. This code doesn't work with Asian codepages. Here's a sample using the Korean codepage:

var x = new Byte[256];
for(var i=0; i<256; i++)
  x[i] = (Byte) i;

var e = Encoding.GetEncoding(50225); 
var y = e.GetBytes(new String(e.GetChars(x)));

for (var i = 0; i < 256; i++)
  if(y[i] != (Byte) i)
    Console.WriteLine(i);

If you run this you can see that one third of all byte values cannot be converted to a char and back to a byte. It works fine for 1252, 437, 1251, etc. though.