I'm looking for an alternative for the now defunct My Private Folder solution from Microsoft. Any suggestions?
You could try TrueCrypt.
Also, I've never used it but AxCrypt seems like it might be easier to manage.
You could also consider FreeOTFE; it also provides On-The-Fly-Encryption (as per TrueCrypt) but has an additional "Explorer" program that allows its OTFE volumes to be accessed on machines without admin rights.
The latter is useful to me because I use it to keep (almost) everything on my USB stick safe in case I lose it, while still being able to decrypt things while on machines I don't control (i.e. so I can continue working on assignments when in labs at Uni).
Warning - it has issues RE a lack of driver signing on 64bit Windows, they are a little awkward to work around, so I cannot really recommend it in the case you have a 64bit Windows OS.