A few months ago I heard on the “Security Now!” podcast that there was a really good open-source encryption application that is so good that it is literally scary. It is so good, and so well done that you can use it for “plausible deniability“. In TrueCrypt, this provides you with (from the TrueCrypt website):
1. True hidden volumes.
2. It is impossible to identify a TrueCrypt volume. Until decrypted, a TrueCrypt volume appears to consist of nothing more than random data (it does not contain any kind of “signature”). Therefore, it is impossible to prove that a file, a partition or a device is a TrueCrypt volume or that it has been encrypted.
Pretty cool eh? As a bonus, you can create a TrueCrypt volume on a USB flash drive for portablity. So now you can carry a USB flash drive around with nothing but “random data”…and if you are caught with the secret plans to take over the world..they can be safely hidden within a secret volume..which on the outside contains your income tax returns that you were safeguarding. I hope to do a full review of TrueCrypt in the near future and let you know how the installation and ease of use is.