Because USB thumb drives are easily mislaid or stolen, they are a real security issue. It's possible to use software that encrypts the portable data by creating a password-protected partition, but this needs to be installed on any PC that needs to read the data.
Kingston's new Data Traveller Elite - Privacy Edition gets around this problem by carrying everything it needs on-board.
Not only does it have an ARM7 co-processor that provides on-the-fly 128-bit encryption of all the data that's written to the disk without noticeably affecting performance, this USB 2.0 thumb drive also contains the necessary drivers and password management software.
When you plug it into a new PC for the first time, a virtual CD containing the drivers and security layer is installed, and then the password prompt appears. It takes a little longer than installing a regular thumb drive, but is well worth the wait.
Owner details are shown on the log-in page - so it can be returned by an honest finder - and you only get 25 password attempts before the drive is wiped, which protects your data from "brute force" attacks. It's also worth noting that our best attempts to recover wiped files after this procedure proved fruitless, which is a good thing.
Verdict: There are certainly cheaper solutions on the market, but this is the first we've seen to keep your data this secure in a manner that's almost entirely invisible to the end-user and doesn't adversely affect the convenience of the medium. It's a perfect solution for both security-conscious corporations and consumers - assuming they're Windows-only.