More than a discussion , this is actually a bunch of questions.

I wanted to test the Gmail offline client but the navigation to Labs setting doesnt happen anymore. I can get to my stettings from the link in new features but there is no option to go offline.

Is this because the local SQLite database was unencrypted?

Has anyone actually found the DB file on their machines after having used Gmail offline?
  

I can't predict the actual reason, but just for a note: Google has abandoned "Google Gears" – the technology behind offline sync. Gears is not compatible with latest version of Firefox, may work in Chrome .

Offline Gmail graduated from Labs in December: http://gmailblog.blogspot.com/2009/12/offline-gmail-graduates-from-labs.html

It can be found in your Gmail Settings now, not Labs. I'm using it, and it works just fine.