Applications
AONTs can be used to increase the strength of encryption without increasing the key size. This may be useful to, for example, secure secrets while complying with government cryptography export regulations. AONTs help prevent several attacks.
One of the ways AONTs improve the strength of encryption is by preventing attacks which reveal only part of the information from revealing anything, as the partial information is not enough to recover any of the original message.
Another application, suggested in the original papers is to reduce the cost of security: for example, a file can be processed by AONT, and then only a small portion of it can be encrypted (e.g., on a smart-card). AONT will assure that as a result the whole file is protected. It is important to use the stronger version of the transform (such as the one by Boyko above).
AONT may be combined with forward error correction to yield a computationally secure secret sharing scheme.
Other uses of AONT can be found in optimal asymmetric encryption padding (OAEP).
Read more about this topic: All-or-nothing Transform