Secure Disk is a higher impact encrypted drive app that goes a bit heavy on the DRM. Adding a couple of drivers from SafeIT [safeit.com] it creates apparently dynamically expanding virtual disk files [.ved] with a minimum size of 32 MB [though when I created a disk that size it showed zero free space]. The virtual disk files themselves stayed the same size in Windows Explorer until I closed Secure Disk, & then they reflected the size of the files I'd copied/pasted there. Each new drive, when it was created, caused Windows Add Hardware dialog to pop up -- once you run through the install however that was it, with no further prompts For That Drive. Double-clicking a .ved file, or right-click -> Open, brings up the Secure Disk program window, even if the app was closed. I didn't see anyway to compact the virtual disks or increase their maximum size, so adding files & deleting them your virtual disks will still be the same size as when they held those files, & you're apparently out of luck if you fill a disk up, with little choice but to create a new, bigger virtual disk & copy files over. All in all it seems easier to use than Microsoft's VHD format, where mounting/unmounting can be a bit of a chore, & of course if you're in XP it's a bit of a hassle adding VHD support in the 1st place.
Installation is convoluted as other have posted, resulting in a new, hidden folder under All Users App/Application Data with 54 files, 86 folders, ~37 MB -- the FileStream program folder with 28 files, 1 folder, ~23 MB -- a SafeIT Security folder under Common Files, with 6 files, 1 folder, ~3MB -- & finally 3 files are added to the System32\ Drivers folder. At 1st Secure Disk didn't show the 180 day license, so I attempted to activate with the key I'd been e-mailed, & although that didn't work, afterward it did show the 180 days. I recorded ~850 new registry entries in XP Pro.
To be honest I don't know why you wouldn't just use Truecrypt for the same purpose, or BitLocker if your version of Windows has it, but there ya go.