For disk and file encryption needs, Truecrypt is a great open source, cross-platform (mac/win/linux) option to consider. Given 6 months and an encrypted disk, the FBI was unable to crack this encryption implementation.
Encrypted Virtual Disks
TrueCrypt allows for encrypting an entire disk, or to build a partition and create a virtual disk. Encryption is on the fly, as files are accessed and moved to and from the encrypted virtual disk.
Setting up TrueCrypt is quite straightforward and a quick process.
Encrypted Operating System
TrueCrypt supports encrypting the Windows operating system itself as well.
Plausible Deniability
One great feature of TrueCrypt is that while the presence of an encrypted disk is detectable, what is inside it is not. This allows for plausible deniability. TrueCrypt allows for two different disks to be present (different sizes if desired). Each disk has a different password. One can provide a password under duress and access plausible disk contents. At the same time an entirely different disk contents could still be protected, and undetectable.
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