This post was actually my reply to an email, but I felt it cleared up a few things that weren't completely clear.  It's sort of anti-SEO.

First the question:-

"Ok, if I uploaded a zip file I want to sell, and use SmartDD, wouldn't that file, that is on my server, be indexed anyway?

I mean the buyer wants to know the location but the search engine looks at the entire site, or do zip files not get indexed by search engines?  I read you can search for a pdf file."

And my response… 

Files only get indexed if someone tells the search engines where they are.  So for instance if you had a file called abc.zip and you put it in the root of your web site (and there was an index.html file there), nobody would ever know it was there except for you.

However, if you then put a link to that file on a web page, you've now increased the risk of it being indexed.  But again, if you don't tell anybody about that web page, you're still safe.

The moment you create a link to that page from another page is when your problems begin.  Even though it may be a page that only a paid customer could get to see, they may use http://del.icio.us to bookmark it.  That happens a lot.

When it gets publicly bookmarked, then it gets indexed by the search engines.  If someone posts the link to that page on a forum, again the search engines will sooner or later index it.

As long as a file is created and sits on its own with no links to it, it will never get indexed, and so it's effectively invisible.  The same is true of any file including PDFs, but excluding index.html, index.htm or any other kind of index file.

SmartDD works to secure files in one of two (or both) ways.  If your hosting allows it, you can store the files outside or above the web root.  cPanel hosting such as provided by Hostgator lets you do that.

When a customer buys she then gets access to the purchased file provided through a special download page and special link which streams the file to her PC.  There's no way the file can be accessed directly by a browser as it's outside the web root and she can't physically navigate to it.  Because she can't navigate to it with a web browser, it can't be indexed by the search engines.

Also, the link itself can be set to allow only a certain amount of downloads to that customer, e.g. 3, and it then expires.

The special download page presented by SmartDD works to dissuade people from sharing it by displaying their full name and email address.  That's not really something anybody is going to do, even for a friend, as friends can sometime share things with other friends, and they share with other friends…

The second way that you can use SmartDD to secure your files is by using the "Display Name" feature.

If you have a host that doesn't allow you to place files outside the web root, then you can set SmartDD to deliver a file using a different name.  So for example, if you have a file called abc.zip, you can deliver it to your customer as xyz.zip.

Again, that would be impossible to index if there were no public links to the directory.  With SmartDD, the customer never gets to see the actual directory that the file is located as the files are streamed to your customers PC through special code.

So by using one or the other method above (or both), and in conjunction with the streaming delivery method, plus the "social engineering" of placing your customers name and email address on the download page, you can completely secure any file.