If you like the idea of storing sensitive data safely, securely, and away from prying eyes, you need to create an encrypted virtual disk on your hard drive. That's easier than it sounds, thanks to Klonsoft's LockDisk. This tool creates encrypted, password-protected, hidden volumes in your system. You can specify the size of your volume to make sure you have enough space for your stuff without wasting disk space. LockDisk works in 32-bit Windows editions. Some users may need to right-click the program's Start menu entry or executable file and select Run as Administrator to use LockDisk. LockDisk is available in several versions; we tried the freeware release, which limits the size of protected volumes to 35 MB.
We started with LockDisk by clicking New on the compact interface's toolbar, which opened the Create Volume wizard. This tool walks user through each step of creating a new volume, but LockDisk has a very good Help file that explains and illustrates each step of the process, too. Creating a new volume in LockDisk is just like creating a new file or folder; browsing to a specific location and naming it. The program uses a default volume, but you can create as many additional volumes as you need, as long as they don't exceed the limit.
We entered the size of our new volume and created and confirmed a password. We could specify a size smaller than 35MB for our volume, but not larger. As soon as we'd created our new volume, an Enter Password dialog appeared (with a check box to enable a Read-Only option) followed in due course by our new drive appearing in LockDisk's navigation sidebar. Load and Unload buttons made it easy to open and close our volume; drag-and-drop capability made it easy to select files and folders to protect. When we were ready, we clicked Unload, and our volume disappeared; clicking Load and entering our password brought it back. If you uninstall LockDisk, your hidden data is safe but inaccessible.
The only thing we could quibble about in the free release of LockDisk is the volume size limit, though upgrades are available.