The values for ProtectionLevel:
0: Strip sensitive information.
1: Sensitive information is encrypted by using local user credentials.
2: Sensitive information is encrypted by using the required password.
3: The package is encrypted by using the required password.
4: The package is encrypted by using local user credentials.
5: The package uses SQL Server storage encryption.
SQL Server Books On Line: Creating a Deployment Utility
Technet: Setting the Protection Level of Packages
KB906562: How to use the dtutil utility (Dtutil.exe) to set the protection level of a batch of SQL Server Integration Services (SSIS) packages in SQL Server 2005