TrueCrypt is a free and open-source program for encrypting data. It's excellent for securing hard drives. It also contains the capability to hide a secret operating system inside another operating system.on how this process works, then read on for the steps.
I'm sure you're thinking two things.
1. Hidden operating system. Cool.
2. Why would I want to do that?
And I quote. "TrueCrypt allows you to create a hidden operating system whose existence will be impossible to prove." Let's say you're being extorted. You can reveal a password to a dummy operating system and they'll never be able to tell another OS exists. It could also be used to hide sensitive data from someone you share a computer with. Or for keeping private data private when inspected by a foreign government at a border-crossing.
First, defragment the drive. Then run your partitioning software. If your new partition will be NTFS, make it 2.1 times the size of the first partition. If you're fine with FAT32, the new partition only needs to be five percent larger. Keep in mind if you use FAT32 you can't store files larger than four gigabytes.
Once you've partitioned, launch TrueCrypt. Choose System and Create a Hidden Operating System. Read the description and press OK. Read the bit about Hidden Operating System and press Next. It will ask you if your machine meets two criteria. It has no sensitive data. And the OS is already activated. If so, press yes. Read the warning about not letting the computer go into hibernation. Press OK.
Now we're into the real stuff. Tell TrueCrypt how many operating systems you're running. For this demo, I'm only running one. Next, it will ask you to set up the outer volume. This will be accessible by the dummy OS. Choose your encryption type. Then it will guess which is the new partition where the hidden OS goes. Confirm by pressing next.
Create an outer volume password. Now it will ask what file system to use for the outer volume. It will then ask to format the partition and warn you that this will destroy all data there. Make sure you don't have any data on that partition, then press yes.
Depending on the speed and size of your hard drive this can take a while. My partition was 60GB and it took a bit more than a half hour. Once the format is done, TrueCrypt will ask you to move some sensitive documents to the outer volume. Just to make the decoy operating system look plausible.
Once you've done that, press next and you'll begin setting up the hidden operating system. Again, choose your encryption. Choose a password substantially different from the one from the outer volume.
Then format the hidden volume. Press Format. Once it's done, press next. Now you'll need to create one more password for the decoy operating system. That's the operating system you're currently using. Press next. Again, it will create the encryption keys. Once you're ready, press next.
TrueCrypt will then prompt you to create a rescue disk, just in case anything bad happens. Press next and an ISO will be saved for you. Open your burning software and create a rescue disk from that ISO. Next TrueCrypt will encrypt the first partition and the copy the OS into the hidden volume.
TrueCrypt notes that this can take hours, or even days, depending on the size of the partition and speed of your computer. You can interrupt it and shut down or restart the OS but that means you'll have to start the whole process over again. So make sure you have the time for this step before continuing.
It will reboot into a very dos-y looking screen and ask for the hidden OS password. The process of copying the hidden OS took about 45 minutes for me. When done, it will ask you for the decoy operating system password, and then reboot into the main system. That system will become the decoy.
TrueCrypt will launch and ask to encrypt the decoy operating system. This again took about a half hour, but you can use the OS while it's being encrypted. Although it does slow things down a bit more if you do.
And that's it.
Next time you boot, you put in the hidden OS password and you'll be taken into the hidden OS. If you put in the decoy password you will be automatically taken to the decoy OS. And you should go to that OS every so often so it looks lived in.
A couple more notes. Remember you can't save files from the hidden OS to the outer volume. Otherwise that would defeat the purpose of the decoy OS.