I just stumbled upon this today ... free open source disk encryption software that supports virtual disk encryption, partition or storage device encryption, and even drive encryption.
In short, you can setup an encrypted virtual drive, you can encrypt a USB flash drive, or you can encrypt your entire system drive.
Supported operating systems: include Windows Vista/XP/2000, Mac OSX and Linux.
Encryption algorithms include AES-256, Serpent and Twofish.
