TrueCrypt 6.0: Better Software for the Paranoid
You and I may have taken the 4th of July off, but the folks over at TrueCrypt didn't. Instead, they pushed out version 6.0 of their on-the-fly encryption utility, with more options than ever for protecting - and hiding - the critical data on your hard drives. Available for Linux, OS X, and Windows, the software is licensed under its own TrueCrypt license, which is not OSI-approved.
The basic idea behind TrueCrypt is "plausible deniability" - that someone who examines your hard drive, even someone who demands and gets your password, shouldn't be able to find all of the encrypted data. They employ a variety of strategies to achieve this, starting with the fact that you can hide a TrueCrypt-encrypted file system inside of any file. You can also put a "hidden volume" on the drive - a TrueCrypt volume inside another TrueCrypt volume, which is statistically indistinguishable from random noise.
TrueCrypt can use a variety of algorithms for its encryption, including AES, TwoFish, Serpent, and combinations of these. The developers have been good about dropping support for algorithms that have been significantly weakened over the software's lifetime.
There are two significant upgrades in version 6.0. First, TrueCrypt now performs parallel encryption and decryption operations on multi-core systems, giving you a phenomenal speedup if you have more than one processor available. Second, it now has the ability to hide an entire operating system, so even if you're forced to reveal your pre-boot password to an adversary, you can give them one that boots into a plausible decoy operating system, with your hidden operating system remaining completely undetectable.
TrueCrypt isn't necessarily for people who have illegal secrets to hide. If you travel with your laptop, and it contains any sensitive information - from your address book to company records - serious encryption is your best protection in case of theft. Remembering a few passwords, and installing a well-tested open source package that uses them, is a small price to pay for peace of mind.