The Encrypting File System (EFS) is a great tool for protecting sensitive documents. Unfortunately, Home Edition doesn't support it, but if you use Windows XP Professional, you can encrypt files by editing their Advanced properties - or use this tweak to encrypt your files more quickly and easily with just a right click:

1. Click Start | Run and type regedit to start the Registry Editor.
2. Navigate to the following registry key:
   HKEY LOCAL MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Explorer\Advanced
3. Click Edit | New | DWORD Value.
4. Name the new value EncryptionContextMenu.
5. Double click the new value. In the Value Data text box, type 00000001 and ensure that the Hexidecimal option button is selected.
6. Click OK.
7. Close the Registry Editor.

Now when you right click a file, a new option (Encrypt) will appear in the right context menu. You can encrypt the file by selecting it.