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RDP security

I have an employee working remotely over RDP from a windows 7 machine to other windows 7 over the internet. The Broadband line I am using is fairly slow and I have no alternatives apart from a leased line which is too expensive. I have used Logmein and a VPN and it is all to slow but the RDP connection is fast enough for him to use but I am concerned about security. I have set it up so only his IP address can access the PC but I cannot see how I can beef up the RDP encryption. I have Googled around and all I can see is stuff on server 2008 terminal services, which is not relevant to this setup.

Is there a way to increase the encryption on an RDP connection? and how safe is this setup?
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Tony J
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I'm not aware of any 'in the wild' RDP vulnerabilities that haven't been long since patched - it's always important to patch anything you are connecting to the net of course.

You could always enable TLS/SS::
Are you using VPN on Windows 2008? If yes choose one of the tunelling protocols :

Also on remote Windows 7 Remote settings check "Select Allow connections only from computers running Remote Desktop with Network Level Authentication"

Sorry - I completely misread this question.

NLA is certainly a good idea.

After connecting via RDP, do you see a padlock in the connection bar at the top of the screen? If yes, click the padlock - what does it say?
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Hi McKnife,

No I do not see any Padlock.

Can I apply a certificate to the connection as I always get an error atconnection telling me the remote computer cannot be verified. do you want to continue?

Also to stop being hacked I imagine I should have a time out on the login if a password fails is that possible?
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May I ask why I got zero points? McKnife only pointed to an alternative source of the same information I provided.