Encryption tools like these will wrap your data in a virtual invisibility cloak. Harry Potter not included.
CNET Editors' ChoiceAug 13
The ultimate freeware encryption program, TrueCrypt is loaded with powerful features that those concerned with protecting their data from thievery should want -- and have.
It offers 11 algorithms for encrypting your private files in a password-protected volume. You can store your encrypted data in files (containers) or partitions (devices). TrueCrypt works hard to offer powerful data protection, recommending complex passwords, explaining the benefits of hidden volumes, and erasing telltale signs of the encryption process, including mouse movements and keystrokes. Though the interface may not be immediately intuitive, its powerful, on-the-fly encryption for no cost still earns the freeware security tool a top rating. Read full review
Though most of the selections in this Starter Kit are a primary followed by a backup, in the Encryption category we strongly recommend using both. TrueCrypt can encrypt your system, but there's not much it can do to protect your e-mail. That's where Enigmail steps in. An extension for Thunderbird and SeaMonkey, it's an absolutely must-use for anybody who's concerned about sending e-mail that can be read by anybody, including your Internet Service Provider.
It uses the OpenPGP standard to digitally sign your e-mail and can be configured to accommodate multiple e-mail accounts. You wouldn't want to encrypt all your messages, but Enigmail is an invaluable resource for messages containing sensitive information. An installation guide is available at the Enigmail Web site. Read full review