Okay well I am not really an expert and I cannot personally recommend anything, as I myself do not encrypt any of my data.
1. After quite a while of hard surfing I found a program which might interest you. Its called Truecrypt. Their home site is
http://www.truecrypt.org/.
About Truecrypt
QUOTE
Creates a virtual encrypted disk within a file and mounts it as a real disk.
Encrypts an entire hard disk partition or a storage device such as USB flash drive.
Encryption is automatic, real-time (on-the-fly) and transparent.
Provides two levels of plausible deniability, in case an adversary forces you to reveal the password:
1) Hidden volume (steganography – more information may be found here).
2) No TrueCrypt volume can be identified (volumes cannot be distinguished from random data).
Encryption algorithms: AES-256, Blowfish (448-bit key), CAST5, Serpent, Triple DES, and Twofish.
Mode of operation: LRW (CBC supported as legacy).
2. To surf anonymously on the internet I personally would use a proxy of some kind. Also install Spybot SD and Spyware Blaster, which would help to block bad internet pages and bad active x controls.