I just want to point out that TrueCrypt is open(ish) source and the license was modified in the latest update in such a way that could be interpreted as allowing forks (and it's unlikely that the TrueCrypt devs would ever actually deanonymize to enforce any license violations anyway). Considering that we've all been happy to keep using TrueCrypt for these last 2 years without even minor updates and the Phase II audit is going on as planned, I think it's a bit premature to be looking into alternatives at this point. I would give it a better than average chance of being forked, and it's already stable, well-tested, cross-platform software that can be used in the meantime. There are mirrors of version 7.1a available to anyone who didn't already have TrueCrypt installed.
FreeOTFE (which was developed by a woman named Sarah Dean... who by the way also had a large TrueCrypt archive) is no longer developed. She stopped responding to email about a year ago and her domains went away too.
(I phrase this as a question because it'd be great if we could have some HN skepticism on this thing. Personally, I think everything basically checks out: open source, free, there's a name, phone number, address, picture etc.)
I worked on a small software package for a financial firm that used AxCrypt for encryption. It wasn't bad from a program integration perspective. I can't personally verify the cryptographic security of it. Like codeulike said, it's a per-file based encryption. No virtual disk services.
AxCrypt looks solid for your purpose. Obviously if you are whoever it is who replaced Bin Laden you can't even trust your keyboard -- it might be reporting what you type to the NSA -- but for ordinary users it is a good choice. Plus, it is mature and unlikely to destroy your data through a bug.
For non-full disk I just make AES encrypted files using 7zip. Considering just about everyone has 7zip installed its actually less of a pain in the ass that you'd think.
The only downside I see is that 7zip seems to be almost abandonware at this point. The installer linked at the top of their page is almost 4 years old and there's a recent beta but they haven't moved a beta to stable in a very long time.
Is there a good way to mount an encrypted 7z archive as a filesystem, for interactive usage?
That was the advantage of TrueCrypt, IMO. Not for FDE (I'm not a huge fan of FDE anyway), but because it created an interactive partition rather than forcing you to decrypt an entire archive to storage, work on it, and then re-encrypt the whole thing and cleanse the storage device you decrypted to.
It seems like putting something together that does that (which is really decrypt-to-RAM) wouldn't be that hard, but there are like a million file encryption tools but very few ones that allow for interactivity.
It looks like WinArchiver can mount 7z and other archive formats. There's not much documentation about it. It does not say if it supports mounting encrypted archives. It does not say if it supports write-access either. The 7z format is normally solid, so unless you're accessing files at the beginning of the archive, it could be pretty slow anyway.
http://superuser.com/questions/760091/windows-encrypted-virt...