Matthew Gream:

....if you have something you _don't_ want found, then simply encrypting it leaving it sitting on your system is probably not going to work. You may decide not to answer any questions about it, you may refuse and so on, but they are going to want the magic little key and keep pressing (maybe while you are under oath). To prevent any of this occuring, the best approach (in my mind) is to encrypt it into a form that will never be suspect as anything more than harmless, trivial, information.

Interesting: an application of steganography that is quite useful even where crypto is legal.