If I type ftps://server.com into the location bar I get the error: "Nautilus cannot handle "ftps" locations."

As I'm sure you know, it handles ssh, ftp and sftp properly.

Support for ftp with an encrypted control channel (and possibly a checkbox somewhere to allow encryption of the data channel as well, but data channel encryption should be disabled by default) should be supported.

Here's why: ssl/sftp encrypts the entire file transfer and so in many cases it is slow and very cpu intense (on server & client) to transfer a file with with this protocol (unless you have a pci ssl hardware accelerator card or something). Encrypting all data is often overkill (I don't care if you look at the ubuntu cd I'm transferring). FTP is insecure with passwords sent in the clear. FTP with an encrypted control channel(FTPS) is a nice balance, passwords are encrypted but data transfer is not, allowing for zippy transfer speeds and low cpu usage on both the server and client.

curlftpfs is a nice little command line utility to mount ftps shares locally. It would be really great to see functionality like what is provided there make its way into Nautilus.