Truecrypt, an excellent encryption tool, returns with version 6.0. It is free Open-Source Disk Encryption software. Truecrypt creates a virtual encrypted disk within a file and mounts it as a real disk. It is also capable of encrypting an entire partition or storage device such as USB flash drive or hard drive. Truecrypt can support pre-boot authentication and encryption is automatic, real-time (on-the-fly) and transparent. It provides two levels of plausible deniability and uses the AES-256, Serpent, and Twofish encryption algorithms.
Most notably as of version 6.0 it can create encrypted operating systems. Quite a handy tool in this age of privacy intrusions.