Encryption is a mechanism by which one can secure important data even if the data is physically lost. I have already given the method by which we can encrypt or decrypt files in Windows 7. That was the tool built in to Windows but now I will mention a few free tools that are used for encryption and decryption without using the Windows tool. It can give you more security as well as portability.
Encrypt Files is a free tool which supports 13 encryption algorithms. It can delete and shred the original files after encryption.
Sophos Free Encryption from Sophos can encrypt and compress files instantly.
MEO Encryption Software can encrypt any file including emails and the attachments.
Crimson 512 protects the encrypted files from brute force attacks. It’s very fast and easy to use. Strong 512-bit symmetric-key block cipher.
GnuPG is a free implementation of OpenPGP standard as defined in RFC4880.
TrueCrypt creates virtual encrypted disks within a file and mounts as real disks. It can encrypt entire partition or storage device such as USB drive or the whole hard drive. This is my personal tool of choice.
AxCrypt is an open source encryption tool which integrates in Windows easily to compress, encrypt, decrypt, send, store and work with individual files.
Cryptainer LE creates 128 bit strong encrypted container (vault) to store any type of data. Uses simple drag and drop operation for ease of use.
CrypTool is an open source e-learning application for the implementation and analysis of cryptographic algorithms.
CryptoExpert Lite is like TrueCrypt and created encrypted virtual disks. These virtual disks are displayed like normal disks with a drive letter.
Dekart Private Disk Light can create encrypted virtual disks within a file and then mount the file as a normal drive in Windows. It uses NIST certified AES 128 bit encryption.
FreeOTFE is an open source on the fly disk transparent encryption system for PCs as well as PDAs.
CCrypt is a command line utility for encrypting and decrypting files and streams.
Steganos LockNote lets you store your notes in a secure place. The encryption mechanism is a part of the note making the application and document one file.