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Quantum cryptography offers the unique possibility of certifiably secure key distribution between remote locations, practical systems require efficient, low noise, single photon avalanche photodiodes (SPADs) to achieve this goal. This letter reports experimental results from a polarization-encoded system utilizing a state-of-the-art silicon SPAD. The system is used to investigate the performance limits of quantum cryptography systems operating in the first optical fiber communication window at wavelengths around 0.8 μm. The results demonstrate the potential for secure quantum key distribution at Mb/spl middot/s1 rates over fiber LANs also carrying conventional high-speed (Gb/spl middot/s1) data channels at a wavelength of 1.3 μm.