Last week, on the new MacHaxor site, I explained how to create an encrypted disk image on a mac, but there are similar tools available for Linux. TrueCrypt allows you to make all kinds of encrypted containers, but one of the most interesting is a hidden partition.
The trick here is to convert all of the space on a USB stick into an TrueCrypt container with a handful of interesting looking, but ultimately fake sensitive documents on it. This container is a genuine encrypted container secured by a strong passphrase. Under normal circumstances, the rest of the space on a TrueCrypt volume is always filled with random data, but when you create a hidden partition in that same space instead, it is not really random, but actually another encrypted volume with a different passphrase, inside which you can safely store your real sensitive documents.
Why bother with all that?