Cryptography is used by the client in a few limited cases for a variety of reasons.
RSA is used in the client to encrypt the login block and ISAAC cipher keys. This means proxy-style programs such as AutoRune can no longer function, as the ISAAC cipher keys are encrypted. Also, usernames and passwords cannot be stolen when the packet passes through the Internet.
An ISAAC cipher is used to encrypt and decrypt operation codes. This, coupled with encrypting the seeds with RSA, is to render proxy-style programs such as AutoRune useless.