There are lot many freeware available for password protection and encryption of USB Drives, but I recommend using the in-build encryption and protection application available in Windows 7 i.e. BitLocker. If you are having Windows 7 Ultimate version installed on your computer, you can utilize the BitLocker application available in Windows. You can encrypt and protect each and every drive on your Hard Disk and enjoy the safe and secured browsing.
BitLocker works with TPM (Trusted Platform Module) installed your computer’s motherboard and secure the data on your hard disk. TPM is a small chip which can store cryptographic keys and can help Windows verify the security check before boot. If your computer is having TPM and you encrypt the drives on hard disk with BitLocker, no one can use your hard disk on other computer by just detaching that from your computer. That means, the hard disk will only work on your computer unless or until you unlock or turn off the BitLocker from Windows.
If you want to have that kind of security in your USB Flash Drive, you can use BitLocker To Go and protect the data on Flash Drive. For USB Flash Drives, you just need to do the encryption and password protection as you may need to use the drive on other computers. That’s why you will get option to encrypt such devices with “BitLocker To Go”.

On next window, you will be asked to provide the password for protected data in Flash Drive.

Note: BitLocker To Go doesn’t require TPM. BitLocker is also available in Windows Vista Ultimate.
If you want to have that kind of security in your USB Flash Drive, you can use BitLocker To Go and protect the data on Flash Drive. For USB Flash Drives, you just need to do the encryption and password protection as you may need to use the drive on other computers. That’s why you will get option to encrypt such devices with “BitLocker To Go”.
On next window, you will be asked to provide the password for protected data in Flash Drive.
Note: BitLocker To Go doesn’t require TPM. BitLocker is also available in Windows Vista Ultimate.
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