Windows 2000's file storage system NTFS enables you to encrypt files and folders on your hard disk. To do this, right-click a file or folder you want to encrypt and select Properties. Under the General tab, select Advanced. Click a check mark in the box labelled Encrypt contents to secure data. When you encrypt a folder, you'll be asked whether you want to encrypt all the files and subfolders in it. No matter what you choose, all files and subfolders subsequently added to the folder will be encrypted as they are added.
This technique has some restrictions. You can't encrypt folders containing system files or compressed files and folders. If you have checked the Compress option, you must uncheck it before you can encrypt.