One thing in Windows 7 that I use frequently is the BitLocker functionality to protect my USB sticks. It is so easy to use and I don’t have to worry about what would happened if I someone knicks it (well, ignore serious hacker attacks).
BitLocker has actually been around since Windows Vista but Windows 7 and Windows 2008 Server R2 supports encrypting removable drives.
This is how easy it is to protect your USB stick:
1. Insert your USB stick in to the computer
2. Right click on the USB drive in Windows Explorer and choose “Turn on BitLocker…”

3. This opens up a wizard that you have to step through.
The first step let you specify if you want to protect your USB stick with either a password or a smart card. I just type in a password (could be anything as long it is complex enough) and hit “Next”.

4. In the next step you have to specify a way of saving a recovery file to the disk. This helps you to access the data in case you forget the password you specified in step 3. So you can either save the recovery key on a file or you can print the recovery key. Then hit “Next” again.

5. That's all you have to do. Just hit “” and then you are done! Easy enough right!


Now when you insert the protected USB stick in to your computer you are required to enter the password in order to get the data on the USB stick:

You can also do more BitLocker stuff if you go in to the BitLocker section in the Control Panel:

Just remember that you need to make sure that the computer you will use your USB stick with has to support BitLocker so don’t take it with you to an important meeting and then realize you can’t access your data.
Also remember that if a serious hacker wants your data – he/she can get it anyway! But at least it keeps most people away from your important data.
You can also as an IT admin apply various Group Policies to control the protection of your data in a better way.
More information:
Bitlocker on wiki: http://en.wikipedia.org/wiki/BitLocker_Drive_Encryption
Good YouTube video: http://www.youtube.com/watch?v=yyYo4IPcykA
BitLocker on Microsoft.com: http://technet.microsoft.com/en-us/windows/aa905065.aspx