The starting point for most Windows administrators will be Microsoft’s Encrypted File System (EFS). EFS is simple to use, effective against casual or inexpert snoopers, and comes free with Windows XP Professional, Windows 2000, and Windows Server 2003. If it meets your needs, EFS is the logical choice.
The question is whether it will meet your needs. EFS was really designed to protect files and folders on a computer attached to a network. Although it will work on a laptop, it’s much more secure when the keys are stored on another computer.
The major drawback to EFS is that it works at the file and folder level, not on the entire disk. This means that the thief can still log onto the stolen computer by one of several methods, such as cracking the password, and use a number of techniques to decode your encrypted files. This isn’t easy, but it’s not nearly as hard as getting at a completely encrypted disk.