The application is called FreeOTFE, which stands for Free On the Fly Encryption. On the fly refers to the fact that the data is being encrypted and unencrypted as it is being read and written to the hard disk.

This free app doesn’t offer a lot of options but it provides an easy to use application that can encrypt one or more files. You can create a block of disk space that is encrypted and then mount it so that it appears as a separate hard disk in windows. As long as the disk is mounted it can be used like any other disk. But once dismounted you need a password to read the contents.

You can also encrypt an entire partition or had drive. Of course, you cannot encrypt the boot drive. It is the old lock your keys in the car dilemma. You need the keys to unlock the car to get the keys. The same thing is true with encryption. You cannot encrypt the drive that contains the software that encrypts the data.

It also has a no install option the lets you encrypt a portable volume on USB drive but does require administrator privileges to use it. This provides a free way to protect sensitive data that is stored on portable media.