I purchased a large USB Thumb Drive in January for various reasons: portability, compatibility and of course cheap massive storage. At the time, I settled on the SanDisk Cruzer Micro 8GB with the retractable USB plug (no separate cover) which now spends most of it's time in my pocket attached to my keys, always ready for instant storage needs. I'm very happy with the purchase so far.
One of the primary uses for the drive was to store personal and work documents. Some of these docs I didn't necessarily want to share with people, like my personal debates on the proper way to install a new roll of toilet paper. (Innie, all the way.) I originally looked for a thumb drive with built in encryption/authorization techniques like a built in fingerprint scanner, but there was quite a price hit for this additional feature. Second I looked at drives that were entirely encrypted via built in software on the device. I felt that was a bit excessive and was concerned the drive would not work on all types of USB equipped devices (like a Wii or XBOX360).
The bottom line for me was that I wanted to encrypt some of the file system and certainly not all of it. So, I began to research software solutions. I found some that integrated tightly with Windows and used what appeared to be rootkit technology to hide and encrypt. That wasn't exciting to me because it would mean a reboot on any new machine I wanted to view my encrypted files on. Other tools I found were also heavy with their installs, which was a big turn off. Also, many of these were timed demos meaning I would have to pay to get my data after the trail period ended.
What I did find was a light weight tool that even had a mobile edition that didn't require a real install to operate on a machine: Cryptainer LE. This tool did everything I wanted: secured files by encrypting and requiring a password to unlock, cost nothing and was extremely portable like the thumb drive itself.
Accessing my data requires launching the Cryptainer software, whether installed on the machine or not. I then navigate to the Cryptainer Volume I want to open (basically a file of fixed size) and enter the password. Cryptainer then mounts the file as a removable drive on my machine. I can put any file I want on the Cryptainer volume and it encrypts it on the fly. When I'm done accessing the files, I just go back to Cryptainer (sitting on the system tray) and tell it to close the volume.
There are a few catches, as no software is perfect. First, the free edition limits you to 25MB volumes. This is enough for my needs, just some Word, Excel and MSMoney files, and you're not limited to the number of volumes you can have. There are "pay for" editions that go up to 500GB that can satisfy more serious sized files. Second is the OS limitations. The app only works on Windows 32-bit OS's, but that's not a concern for me at the moment as that's all I use (Windows Vista, 2003 and XP). Soon, however, I will need a 64-bit solution and hopefully the software will support it at that time.
If you're looking for a safe way to store data that may fall into the wrong hands, I recommend you try out Cryptainer LE. And if you find something better, let me know!