No, there is no need to decrypt it first, formatting the encrypted drive is enough.
About the second question, if you copy the whole disk (ie not only an encrypted partition) this should work.
Didn't try it myself though.
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Well, then it's a bit unlucky.
Because of this, I prefer to separately encrypt partitions rather than the whole disk.
Well, I took the hardheaded way and did the thing I know works 100% of the time: a raw unencrypted image of both partitions. After I'm done with the experiment, I can restore the partition table, then the content of each one. And if that doesn't work, my data is safe (that's what I care about the most), so I can just reinstall the OS and copy back from the second image.
After all of this, the entire disk would have to be reencrypted, but since I plan on installing Windows 8, I'll do that after the new system is in place.
...which didn't work. :lol:
But I don't care, because my data is safe. I can repart, install 8, then robocopy files from the disk image to the second partition. The only downside is doing this under the immense heat that scourges this city right now.
Later edit: I have the OS installed and was copying my things, but the computer shut down halfway through simply due to the high temperatures :dabs: