Googling 'file vault applescript' reveals that there is a bug in the File Vault/Finder Applescript interaction, read more here http://scriptbuilders.net/files/filevaultprooffinderselectiontoaliaslist1.2.html . SyncTunes uses the Finder's Applescript APIs to access iTunes' music files.

At the moment it seems that the iTunes Library cannot be in a File Vaulted area

There is a workaround by moving the iTunes Music folder out of File Vault. If you are happy to move the music then it is an easy job to do ...

iTunes uses the ~/Music/iTunes folder to store 3 items:
1. iTunes Library file
2. iTunes Music folder, which holds all the tracks
3. iTunes Music Library.xml file

Create or identify where you want to move the iTunes Music folder. Create any folders than you need then drag and drop the iTunes Music folder into its new location. On the Mac that I just tested this on, iTunes will update itself to track the location of files.

Next in iTunes open the Preferences and select Advanced, and the General tab. Now update the iTunes Music folder location.

I have used this technique for sorting the music on a different disk in my old Powermac G4 400, and it works with SyncTunes because that was my original development machine.