I recently had someone email me asking for help with the built-in Windows XP encryption options. This lets you encrypt a file so that only you as the logged in user can see it. Another user, including an administrator, can’t read the file. The Encrypted File System (EFS) is not available in Windows XP Home. It is only part of Windows XP Professional and Windows Server 2003.
Here are some helpful links if you want to learn more about EFS:
Windows XP Pro: Using File Encryption – part 1
http://www.practicalpc.co.uk/computing/windows/xpencrypt1.htm
note there are 4 other parts that you can find from the 1st partFree file encryption with the Windows XP Encrypted File System (EFS)
http://www.iopus.com/guides/efs.htmHow To Encrypt a Folder in Windows XP
http://support.microsoft.com/kb/308989/How To Encrypt a File in Windows XP
http://support.microsoft.com/kb/307877Google Search for windows xp encryption