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I usually partition my hard-drive so that the OS and applications are on C: and ll the data, including user folders such as Documents are on D:. I do this not for any performance gain, but just so I can format C: and reinstall everything if I have to without messing around with my data.

I'd like to use TrueCrypt and encrypt the entire hard drive so that I have a boot password and so that both logical drives will be available when the system boots. Will I still be able to format C: and install a new OS and apps with TrueCrypt there? How?!

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Yes. First install and get your system running the way you want it to. You can then install TrueCrypt and encrypt your whole system partition.

Going through the steps, you'll select Single Boot and it will ask you to make a recovery CD and test boot. Just go through the steps and you're drive will be encrypted. Upon booting, it will prompt you for the password.

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I think I didn't explain myself well. I want to encrypt both C: and D: together (full hard-drive encryption) so that A) both of them are encrypted B) I have a boot password C) both of them exist when Windows boots. – Jonathan Jan 6 '12 at 16:12
Also, my question was if I could format C: and reinstall windows and apps after I encrypt the entire hard-drive – Jonathan Jan 6 '12 at 16:12
Keep in mind if you format your c: it will wipe out the TrueCrypt bootloader. So your answer is no. You cannot format your and maintain the encryption. – kobaltz Jan 6 '12 at 16:14

Fortunately you can use TrueCrypt Rescue Disk (TRD)!

If Windows is damaged and cannot start, the TrueCrypt Rescue Disk allows you to permanently decrypt the partition/drive before Windows starts.

So you could decrypt the entire hard-drive, format C:, reinstall everything and encrypt the drive again.

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