You can encrypt your files or folders in Windows XP without using any third party software. However, the encryption can be performed only on NTFS volumes. Encryption is achieved by applying an algorithm and only the person with correct “Key” can unlock the code. This is all done in the background and has no effect on computers performance. You can copy or move encrypted files just as you would any other files.

The only problem you will encounter is if you copy or move an encrypted file or folder to a non-NTFS volume. If this happens, encryption will be lost. To encrypt a file or folder:

• Double click on “My computer” and navigate to the file or the folder that needs to be encrypted.
• Right click on it and then click on “Properties”
• On the general tab, click on “Advanced”. In “Advanced attributes” dialog box, check “Encrypt containts on source data”, and then click on “OK”.
• Click on “OK” twice to close the dialog boxes.

Now switch to other user and try to find the encrypted folder!