Traffic must be classified as "interesting" in the dialer list when doing encryption over a DDR link.Note: Compression does work in Cisco IOS Software Release 11.3, but it is not very userful for encrypted data. Because the encrypted data is fairly random-looking, compression only slows things down. But you can leave the feature on for non-encrypted traffic.
http://www.cisco.com/en/US/tech/tk583/tk372/technologies_tech_note09186a0080094628.shtml#sam4
To check the configuration also
To configure Cisco Encryption Technology (CET) encryption with a GRE tunnel, you must configure encryption on the tunnel's interface.
http://www.cisco.com/en/US/tech/tk583/tk372/technologies_configuration_example09186a00800945dc.shtml