@saxsux : and what do you do when you loose the password on the rarfile on your cd ? You read what you write on the label ?

Absloutly DriveCrypt is the way to go. If you have data that you are willing to go through and hide in some obscure directory and change the extension then encryption is the only way to go. For the most part using very week encryption such as the ones offered by WinRAR, MS Word, WinZip, etc. will only buy you about 3 mins of time. The very first "hacking" exploits revolved around a WinZip file that I didn't have the password to. It took me awhile but needless to say it was finially opened.

AES is prob your best bet right now. Last time I checked, if you have a good password, the sun will go supernova before someone will break your data.

If you don't want to go through that much trouble (which is not that much trouble at all and much easier than renaming your extenstions) you might want to consider built in EFS in Windows XP. You will pretty much have to have a sperate account from your kids if you want to hide stuff from them and they can not have an administrator account. For all pratical purposes this offer little protect also just for the fact that you have the administrator password you have access to the files. This buys you 10 mins, enough time to restart the computer, boot from a Linux CD, and grab the SAM database.

ADS (alternate data streams) kinda scare me. Just because M$ wanted to support the Mac file system they added ADS. I don't know of any in the wild exploits that use ADS but I will not be suprised when they do hit.

You may want to try Cypherix

http://www.cypherix.com/hide_files_and_folders.htm

Do you use Cypherix ? Are you satisfied with it ? Can you tell us a little bit more than what the tile looks like (hide files and folders) ? Nevertheless, this seems to be exactly the subject of the present topic...