As promised keeping you up to date with how I went.
I created a password on the drive, copied my content across and then plugged it in to the WD TV Live SMP and indeed it poped up a message box asking me if I wanted to unlock the drive.
I typed in the password and then it is now compiling the media library so looks like all is well yay!
Yep Library compiled all is well, shares the drive over the network too. Seems to remember the password even if you turn the unit off. I think it is just if it looses power it will prompt for password. Happy 
Also I’m using the previous version firmware because we all know how stuffed up the latest firmware is.
