Talk:Encryption, NTFS Support, and Windows Share Management
I've been trying to solve the network shares caveat, but unfortunately, even when you manage to get TrueCrypt running as a service it doesn't work.
However, whilst fiddling about I ran into some reliability problems with TrueCrypt, so I looked for an alternative solution.
What I came up with uses tools from VMware, namely the VMware Disk Mount utility and an evaluation version of VMWare Workstation 5.
The main differences between using VMWare and TrueCrypt is the size of the virtual disk files that are created. If you create a 500GB disk with TrueCrypt it occupies 500GB, even if there's nothing on it. VMWare virtual disks expand as they are filled, so an empty 500GB volume will only take up a few MB.
Obviously, using VMware doesn't encrypt the data, but if you don't need this level of security it's a good option. As far as I can tell, the VMWare software uses substantially less system resources.
You can get the VMWare software from http://www.vmware.com (the VMWare virtual disk format is open, so you can also find various third-party tools scattered around the net).
You'll also need an OS boot disk to create the initial partition(s), but you can format the partitions (FAT or NTFS) once they have been mounted.