Recommend using Truecrypt. You can get it at truecrypt.org
Easy to use with very strong encryption not tied to machine, user
account or other features of the OS.
I have recently installed AxCrypt beta and it is working well for me (also
using XP Home). http://www.axantum.com/ . You need a floppy disk drive or a USB flash drive
to store the secret key securely.