Microsoft now offers, for free, Private Folders 1.0, using password protected folders. It is a step to protect sensitive data from prying eyes. Though billed as being for a computer that multiple people use, it may also help protect against data theft by hackers and thieves.
Then there's file and folder encryption too using XP's Encrypting File System (EFS). The Federal Government will soon have to start using encryption on all its laptops, notebooks, tablets, ... (portable computers). Just remember -- encryption is not for files you need to share.
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