Best encryption software I've found is TrueCrypt. Install on either the flashdrive or your own computer, but you need the install folder to open it.
I have it installed on mine(can fire it up on ANY computer this way), and encrypted a 100mb section.... 256-448-256 encryption. About as secure as it gets. Also encrypted my space at school, need to have the flashdrive in the comp to open the prog to get at my files.
Never going to get 100% secure files, somone will eventually manage to crack it, but the 256-448-256 should keep them occupied for a few weeks IF they manage to get my flashdrive.