Windows 2000 and Windows XP come with the data encryption builtin. If you need data encryption to protect your data, consider Jetico's BestCrypt. From the site:

BestCrypt creates and supports encrypted virtual disks and these disks are visible as regular disks with correspondent drive letters (for example, D:, K:, Z:, i.e. with any drive letter that is not used by other system devices). The data stored on a BestCrypt disk is stored in the container file. A container is a file, so it is possible to backup a container, move or copy it to other disk (CD-ROM or network, for instance) and continue to access your encrypted data using BestCrypt. Any free drive letter in the system may be used to mount and to open an encrypted file-container for access. When the virtual disk is opened, you can read and write data as if it were a conventional removable disk. BestCrypt is totally transparent for any application program. Your data is BestCrypt's only concern and enhances your basic right to keep documents, commercial proprietary knowledge and private information in a confidential fashion.