Alright so this is a tutorial about hiding and encrypting your files completely, with ease.
It's a long tut but its well worth the read!!

Lets get started..
First gather a bunch of files that you want to hide, but not desperately. For example your girlfriend's striptease video or some illegally acquired music. It doesnt matter what size, or what filetype they are. Just gather a bunch of files into a folder. These files will serve as a first line of defense.
Easy enough?

Next download TrueCrypt.
It is a truly excellent encryption software that you will soon learn to love.

Install and open up TrueCrypt.
Navigate to tools > volume creation wizard.
Make sure Create an encrypted file container is checked and hit next.
For volume type select Hidden TrueCrypt Volume and hit next..
Check normal mode and then hit next.

Select a spot for the file to be created.
You could for example put it in my documents, C:\Windows, or somewhere else that noone would go.
It doesn't really make a difference because nobody would know what to do with the file if they found it, its useless by itself.
Name it whatever you'd like. A good example is Biology.doc
So it appears to be a document.
For the next section, you will be asked what kind of encryption you would like. AES is decrypted the fastest and its not the highest level of security but for the first line of defense, lets leave them on the default of AES and RIPEMD. If you need help deciding hit benchmark to see how quick your computer can handle the different methods.
Almost there, stay patient

Choose how much space you want to reserve for all of your hidden files, thats right ALL of them. Not just the first line of defense (aka Outer Volume), but also the 2nd line of defense (Inner volume).

I recommend 10gigs or so, but it varies for everyone. Don't worry you can always redo the process and transfer the files later if you want more space.

Now choose a password you wont forget, and try to make it long and unpredictable.
Hit next.

This next part may seem complicated but all you need to do is hit format
Don't worry you wont lose anything, it's just formatting the file you created earlier to the proper size.
Now youve created your first layer of security. You may choose to stop here but I recommend you continue for the added protection.
Click open outer volume to access it.
Or you may go to My Computer and select the new disk from there.
Good you've decided to continue .
Fill this "Outer volume" with the files I asked you to gather at the beginning of this tutorial.
Hide whatever you'd like in here, and then close it.

Almost done! Only a tiny bit to go!
Great so now you have your hidden volume, it's encrypted and nobody but you can access it.

Say you have some more valuable information, TOP secret, and only for your eyes! That you never want anyone else to see without your permission.
Thats the next part, where we create a hidden volume INSIDE the previously created hidden volume! With stronger encryption.

So hit next.
Itll again ask you for encryption settings. Depending on your purposes you may choose any of them. AES being the weakest (although still very strong), Serpent-AES-Twofish being the strongest (totally unnecessary).

I chose AES-Twofish and SHA-512 because its an amazing algorithm.
Hit next, and now choose the size you want for this ultrahidden file.

Since it will be going in the previously created volume, it needs to be less than what you created the first time around. So if you did 10gb, maybe you could choose 8-9gb, depending on your purposes.

Choose a password again (it MUST be a different password than the first).

Leave everything the same again and hit Format!
Once its done exit the wizard and you'll be back at the main program.

Hit select file and find the file we previously created. Select it and then hit mount. Enter your password for your first/outer volume.
Go to "My Computer".
You will see a new drive, this is where you can hide your files. Its the first layer of security.
To see your second layer of security, do the same thing as above. Select your file, but this time instead of typing in your outer volumes password, type in the second one we made for the inner volume.

Go back to My Computer, and youll see the same disk drive, but no files will be in it. This is your ultrahidden volume.
You may now populate the drive with whatever you wish. These are your your files that you don't want anyone to see!
When your done using it hit dismount.
If you ever want to get rid of all the information its as easy as deleting the file we created earlier.