Over at Textual Relations, Adam Heckler has a good description on how to encrypt and hide a Windows partition. Though it accomplishes its task (and well!) it will not be hidden from most technologically aware individuals, and the encryption key can be subponaed by the court (if that would be of concern to you). However, if all you want to do is to encrypt files and hide them from the usual prying eyes, it may be just fine.
The steps (concisely put) are these:
- Shrink the current Windows partition
- Create a new partition (to store files)
- Create a new encyrpted filesystem (using TrueCrypt) on the new partition
- Unmount the disk using the standard Windows tools
As you can see, the “hiding” of the partition is merely unmounting it – but it will not be visible to anyone unless they go looking for it. For protection against most normal users, that would be fine. The disk will not show up in My Computer though it may show up in listboxes for mounting disks and other such things – this would bear investigation.