TrueCrypt is a software system for establishing and maintaining an on-the-fly-encrypted drive. On-the-fly encryption means that data are automatically encrypted or decrypted right before they are loaded or saved, without any user intervention. No data stored on an encrypted volume can be read (decrypted) without using the correct password or correct encryption key. Until decrypted, a TrueCrypt volume appears to be nothing more than a series of random numbers. The entire file system is encrypted (i.e., file names, folder names, contents of every file, and free space).
This software is highly recommended for securing data on laptops.