So I had a scare this past week (couldn't find my thumb drive) and figured I'd better put in some protection on my thumb drive.
What is the best way to encrypt the data on the thumb drive? I am a Windows user, not concerned about having access to these files on any other system. I would want access from Windows XP and up.
Truecrypt, with an executable of the installer in the thumb drive (unencrypted ofc) so you can install it on any computer you plug your thumb drive. If it's possible encrypt with a pass in the form of HA&%^&G^ARELIBSFhahdjag62r&^^^5129380y. Drawback of this is that you'll have to carry another thumb drive with you to contain your password in .txt. Unless you can remember something like that :P.
You have cheap options like Kingston's Data Traveller which provides an encrypted volume plus an unencrypted volume.
Or free options like Truecrypt and PGP - which pretty much do the same.
As to whether these are the best? Depending on what you need, Ironkey might be more suited for higher sensitivity data.
There is such a wide range your best bet might be to look at how sensitive your data is, and use one of the industry leading names - the ones listed here may not be the industry leaders in 5 years time.
@Rory mentioned the Ironkey I thought I would expand on this as I have one.
I've found the Ironkey to be an effective solution particularly as it works under the three major OS's.
Although the it is expensive compared to other solutions, its fast and very well made and obviously the security is top notch. It has an option to self destruct your data after so many wrong attempts at the passphrase.
The best, cheapest and easiest option would be a software solution that comes with the cipher text. You could put both a TrueCrypt binary and a container on an old-fashioned USB storage drive. TrueCrypt runs on Windows, Linux and Mac OS.
It has also been shown that some (not all, but some) encrypted thumb drive have weak implementations like storing a hash and powering up the storage when presented with valid input. Hack: power up the memory yourself, unsolder off microprocessors etc.
And always remember:
You cannot reliably remove data from flash memory. Really confidential files must only be stored in the encrypted part and might be available to third parties even after removal, when stored in the clear just once. (cf. Wei et al., Reliably Erasing Data From Flash-Based Solid State Drives)
My reputation is not high enough to comment Erethon's answer but I'd like to make two points:
a. The "mobile" Truecrypt solution works only when you have admin rights on the (win) system you want to use your thumb drive, unless Truecrypt is already installed.
b. Instead of using such a long password Truecrypt offers the use of "Keyfiles". From the manual: "Keyfile is a file whose content is combined with a password". You could therefore use a simple (easy to remember) password and have on the same thumb drive (on the unecrypted partition), or a different one, a file that will work as your keyfile. The knowledge of which one it is will be your second "password"
You didn't say what OSs you care about. If you are using an appropriate edition of Windows 7 you can use the built-in BitLocker To Go support (e. g. http://technet.microsoft.com/en-us/library/ee449438(WS.10).aspx#BKMK_whatisbltg).
