Fred from NY writes:
Is there a way to password a flash drive?
The most reliable way to password protect a flash drive is to encrypt it, and the best free program currently available for encryption is TrueCrypt. This program features a powerful form of disk encryption which allows an entire drive to be encrypted (or a specific file created on a disk which will be “mountable”). Mounting allows a virtual drive to be created and stored inside one encrypted file on a disk which you can access by a drive letter on your computer.
Why is it best to use this mountable file option when creating your encrypted flash drive? Well, if you use the “whole drive encryption” the drive is useless without installing TrueCrypt. If you use the file method you can still store non-encrypted information on the flash drive for anyone to access and keep the encrypted information in a special password protected file.
The instructions on how to create a TrueCrypt encrypted flash drive can be found at TrueCrypt’s website (I’ve copied the relevant information below)
How can I use TrueCrypt on a USB flash drive?
You have two options:
- Encrypt the entire USB flash drive. However, you will not be able run TrueCrypt from the USB flash drive.
Note: Windows does not support multiple partitions on USB flash drives.
- Create a TrueCrypt file container on the USB flash drive (for information on how to do so, see the chapter Beginner’s Tutorial , in the TrueCrypt User Guide ). If you leave enough space on the USB flash drive (choose an appropriate size for the TrueCrypt container), you will also be able to store TrueCrypt on the USB flash drive (along with the container – not in the container) and you will be able to run TrueCrypt from the USB flash drive (see also the chapter Portable Mode  in the TrueCrypt User Guide ).
What makes this software so fantastic? The open source nature of the software means it’s free to use and has been tested by many individuals to determine the encryption is strong, secure and quick to use (once you get a hang of it.)
Another alternative is to purchase a flash drive with built in encryption. Some flash drives have a hardware encryption which is accessed first through software that you run off the flash drive while others have a key pad to enter in a password before the drive will be accessible.
Which is right for you? The bonus of a hardware-based solution is it will run on any system that accepts a flash drive, while the bonus of the software-based solution is the encryption standard used can be stronger (multiple encryption types, hidden volumes, larger passwords or public/private key files).