Reading about others who have fallen victim to a steady stream of exploits has me extra-conscious about security these days. I'm trying to choose better passwords and lock down files with sensitive information. That latter point is especially important to me since I'm storing, transferring, and backing up more files through the cloud.
One of the best utilities for encrypting personal data is TrueCrypt. Using this freeware program, users can create single-file archives that encrypt any data stored in them. What makes TrueCrypt special is that these archives are mounted and accessed just like regular drives in your operating system. That means that you can save files from your favorite application directly into the TrueCrypt volume. You can copy, rename, or delete files using the same file managers you typically use. Once a volume has been mounted, no special accomodations are needed to store and retrieve files in it. It couldn't be easier.
Once the volume has been dismounted, it looks like a single file. That file can itself can moved or copied, and it will take all the encrypted data along with it. The file can be created at a fixed size or grow to accommodate data as it is stored in the volume (a less secure method, by the way). More advanced users may choose to encrypt an entire physical volume using TrueCrypt. This can be done if you want to encrypt an entire hard drive or flash drive, for instance.
TrueCrypt encrypts data using some of the industry's best algorithms, ciphers with names like AES, Serpent, and Twofish, alone or in combination with others. The volumes are password protected, which means, as always, that the protection your files enjoy is only as good as the password you choose. The encryption itself, however, is notoriously difficult to break.
TrueCrypt runs on Windows, Linux, and Mac OS, and volumes can be moved across platforms. It's free to download and use, but they do accept donations.