TrueCrypt – Free Open-Source On-The-Fly Disk Encryption
http://www.truecrypt.org/

Free open-source disk encryption software for Windows Vista/XP/2000 and Linux Main Features include: a) Creates a virtual encrypted disk within a file and mounts it as a real disk, b) Encrypts an entire hard disk partition or a storage device such as USB flash drive, c) Encryption is automatic, real-time (on-the-fly) and transparent, d) Provides two levels of plausible deniability, in case an adversary forces you to reveal the password: 1) Hidden volume (steganography), and 2) No TrueCrypt volume can be identified (volumes cannot be distinguished from random data), and e) Encryption algorithms: AES-256, Serpent, and Twofish. Mode of operation: LRW. This has been added to Privacy Resources Subject Tracer™ Information Blog.