What is the best way to protect files I want to keep private. I can put them in a zip file with a password. Sometimes I do this, and then change the file extension so it is not clear what type of file. Should I consider encryption or a utility? Does anyone else have any interesting hints?
It depends who you want to protect from. If it's only from casual onlooker, then your method is fine.
Changing the extention of a file is not very good protection and password encrypted zips are poor protection.
Otherwise, you need to use more serious encryption. But it does not stop there. You may be aware that your file system keeps a trace of everything that goes through it. So if you are serious about protecting some files (such as financial information or precious photographs) just encrypting them after they were in a non encrypted area of the disk may not be enough.
Still as a start you may want to look at OTFE (on the fly encryption) software.