MarkS: You're making the incorrect assumption that just because a person is not breaking any laws, that automatically means that the government doesn't want to stick their nose into it. Also, a lot of what you're saying implies that keeping the algorithm secret, rather than just the key itself, is somehow necessary for security. It shouldn't really be that way. Although keeping the algorithm secret technically does add a small amount of security, it's the secrecy of the key and the quality of the algorithm that really protect data.
First off, I made no assumption. Secondly, this algorithm is unique. It requires a key the same length as the data and completely random. It is not breakable without the key. The key is, well, key. Without the key decryption is not possible. If I don't know you are using this algorithm, I'll waste time and use whatever methods I have at my disposal that I know will work at breaking encryption. However, once I know that you are using OPC, the only way to break it is by intercepting the key. That, as it turns out, is rather easy when you have access to, and/or control over, the delivery methods. So, yes. In this case, keeping the algorithm secret is paramount. If I do not know that you are using OPC, and no one does, so I wouldn't have reason to suspect it, then I have no way of knowing that the random data I just intercepted is the key and not more encrypted data.
Again, the key can only be used once. This isn't like RSA encryption where you send the public key to your recipient and keep the private key to yourself. There is only one key and that key MUST travel to the recipient for decryption. It is the fatal flaw in the OPC algorithm.