Truecrypt is software that is used to encrypt or decrypt (virtual) partitions or entire drives.

Truecrypt is an open-source on-the-fly disk encryption utility for Windows, Mac OS X, and Linux, currently maintained by The TrueCrypt Foundation.

Truecrypt, unlike most other backup utilities, creates a single encrypted virtual drive, which is then mounted. Any files written to the mounted virtual drive are then encrypted and stored in the virtual drive.

It also allows on-the-fly encryption of whole partitions and storage devices, as well as operating systems.

Truecrypt on Windows XP