If a flash drive contains sensitive information–such as bank account statements, credit card numbers, or your own unique, brilliant plans for world domination–you should password protect, if not the whole drive, than at least those particular files.
You’ve got two options for protecting data on a flash drive: You can use encryption software, or you can buy a special, encrypted flash drive.
Jon L. Jacobi recently wrote The Best Encrypted Flash Drives, and recommended the Imation Defender F200 as the top choice (although a pricey one). Jon considers an encrypted drive to be the most secure option, and argues that “a chip is harder to hack, and to reach it means actually tampering with the drive, which is easy to detect.”
Not everyone agrees. Security guru Bruce Schneier told me that he thinks it best to separate the encryption algorithm from the hardware. “So I use random flash drives with PGP Disk for security.”
The current version of PGP Disk costs money and is geared strictly for business, so I recommend TrueCrypt, which Schneier described as “another fine alternative.” It’s not only free, but open source, and can be easily made portable (meaning it doesn’t have to be installed–an important feature if you’re carrying the data on a flash drive).
After you install TrueCrypt onto your PC, you can simply drag the program folder (which is less than 8MB) to your flash drive. Once there, you can run it on any Windows computer with a USB port. Just open the folder and run the program.
With one caveat. Launching TrueCrypt on a PC where it has not been installed brings up a User Account Control message. If you’re not logged on as an administrator, you’ll need an administrator password to run the program.