The software package TrueCrypt offers easy to use functions for encrypting hard disk partitions, USB drives, and other external storage devices. Once a file system is encrypted, TrueCrypt performs the decryption and encryption on-the-fly as files are accessed, without further user intervention. The user can choose from several encryption algorithms (AES-256, Serpent, and Twofish).
Encrypting your files is a way to safeguard information that you don't want to be stolen. For example, if somebody steals your laptop computer on a trip, you don't need to worry that private data on it may be used without your permission. Only people who know the password that you used to do the encryption will be able to use the files.
As you would expect, encryption slows down reading and writing files, and the initial encryption of your hard drive can take several hours. However, TrueCrypt has parallelization and pipelining methods to read and write data as fast as on unencrypted drives. There is also a user friendly graphical interface for administration.
Other useful features include plausible deniability, hidden volume, and hidden operating system. You also have the option to use hardware acceleration for AES encryption, which is 4-8 times faster than software encryption. TrueCrypt is free and open source and can be downloaded from the TrueCrypt website.