“Dropbox applies encryption to your files after they have been uploaded, and we manage the encryption keys. Users who wish to manage their own encryption keys can apply encryption before placing files in their Dropbox. Please note that if you encrypt files before uploading them, some features will not be available, such as creating public links. Doing so will also make it impossible for us to recover your data if you lose your encryption key.”
Simply move encrypted files or folders into your Dropbox folder. Some functionality is sacrificed when doing this so be select about which documents you encrypt.
If you want to take yet another security step and hide the folder of encrypted documents on your computer, check out this quick instructional video: Make A Secret Encrypted Drive.
You don’t need to encrypt every file stored on your computer or in Dropbox, but to keep prying eyes at bay, use TrueCrypt for select files and folders.