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Just upload encrypted filesystem containers and go about your business.

Truecrypt containers are nice, but the downside is that the entire container has to be re-uploaded every time something inside it is changed. Good argument for having multiple small containers, but then it's a bit of a shell game figuring out where your data is...

If you're looking for file-by-file encryption, try AxCrypt. It can bulk encrypt / decrypt files, apply strong encryption, and securely shreds the temporaries once you close up a file you opened for whatever reason. And it's also open source ;)

Try AxCrypt. http://www.axantum.com/axcrypt/ Open Source, AES128. I am not a cryptologist, so I can't vouch for how good it actually *IS*, but I've not been able to find anything other than a vague post on version 1.1 having an implementation bug.

I prefer individual file encryption for my dropbox files. I use AxCrypt http://www.axantum.com/axcrypt/ which has right click integration to encrypt files.

and it doesn't integrate open source software. The closest thing to the "home" directory on Windows is Documents and Settings -> User Name.

I don't recommend encrypting your "home" directory on Windows, because Windows tends to self destruct, and the last thing you want is for your data to be lost permintaly when that happens. If you have specific files you need to encrypt, try AxCrypt, make sure you have a portable version of AxCrypt to decrypt the files if needed.

I prefer Axcrypt over Windows Compressed Folders password protection. AxCrypt is free and open-source.

From their FAQ:
Why is AxCrypt better than Windows Compressed Folders password protection?

In the July 2003 issue of PC World magazine, there is a description of how to password protect files using the built-in Windows Compressed Folders of Windows XP and ME. This is a WinZip compatible extension of the Windows Shell (Windows Explorer). The problem is that since it's WinZip-compatible it suffers from the same weakness as does WinZip. WinZip (and thus Compressed Folders) password protected archives use a proprietary and weak algorithm that is known to have the following weaknesses, exploited in numerous 'Password Recovery' products and services:
        * If the attacker knows the contents of one of the files in the archive, the password is susceptible to a so-called known plain-text attack. AxCrypt is never susceptible to this kind of attack.
        * If the archive contains 5 or more files, password recovery (i.e. cracked protection) is guaranteed. With AxCrypt you can have any number of files encrypted with the same passphrase without affecting the security.

Here are the links: http://www.gnupg.org/ http://www.axantum.com/AxCrypt/ http://www.rarsoft.com/

open source, free, and simple to use. Encrypting files and shredding(!) them after use.

..and have a look at Axcrypt for data that's to be sent via CD/DVD (or emailed) - very easy to use to create encrypted, self-extracting (if you know the key) files.

http://www.axantum.com/AxCrypt/ ...and it's Open Source

The answer is encrypted virtual drives using TrueCrypt or even possibly AxCrypt, which can handle individual file encryption and allow for password entry every time you need to open the file.

I don't know if it's of any use in this situation but you might want to look into AxCrypt

http://axcrypt.axantum.com/