TrueCrypt 6.0a was just released with a couple of bug fixes on the heels of the 6.0 release on July 4. TrueCrypt is an Open Source multiplatform (Windows, Mac OS X, Linux) encryption tool that can create either encrypted container files (which can contain multiple files within it like a virtual disk) or whole-drive encryption.

I'm putting together a Freeware/Open Source security tools for Windows list and TrueCrypt will definitely be on that list.