It's a free, open-source, data encryption package which provides you with a new drive letter; all files copied to the drive are automatically encrypted. There is an underlying data file with the name of your choice. The encryption standard is very high; it supports 256 bit AES (Advanced Encryption Standard) which is generally thought to be uncrackable (and anyone who can crack it would never let on by cracking anything for anyone else.)
And better, TrueCrypt even provides you with the option to hide the fact you have hidden something. Basically you can set up a drive within a drive with two different passwords. Under coercion you hand over the first password and simply deny that there is a second password; obviously the second password is where you have your really secret files. There is no way anyone can prove that there even is a second password.
I'm always amazed when I hear news along the lines of, "such and such was found on somebody's computer," when it is so easy to hide files. If you have anything to hide - then hide it. And if haven't anything to hide then hide something anyway just to take the heat off the rest of us.