I use this software to keep confidential records of my tenants (i.e. their Credit Reports):
http://www.truecrypt.org/docs/
This easy to use software will create a hidden storage volume - that is: it will add a new drive letter (i.e. D:/) to your file system when you set it up and mount it (open it up). When you 'mount it' or start it, it will open up a new drive letter on your file system into which you can stuff any file, folders, images, and anything else you want to keep encrypted and safe from prying eyes. I believe it uses strong encryption technology.
When you 'unmount' it, or close it, it will simply disappear from your file system. Research it - it's worth it I think and it is free...
For all my passwords I use a free utility called Keepass:
http://sourceforge.net/projects/keepass/ - this fantastic little utility is very easy to use. I work as a consultant so I am required to keep track of I would guess 70-75 different passwords to support my clients. In addition, there are lots of personal passwords from user groups, forums, on-line banking and anytime I sign up to a new forum to try it... This utility lets you categorize them in an easy and meaningful way and you can Search it quickly to find what you need. The password vault is encrypted so it's safe. The tool will even generate strong passwords for you so you don't end up with 'abc123' on everything...

Once you start using this little tool, you'll forget all about your file full of passwords - unless you really wanna keep it 'old school'... hehe
Good luck -
James
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1987 Mercedes 300SDL; SOLD
1985 Mercedes 300D; SOLD

2006 Honda Pilot - wife's ride; 122K;
1995 Toyota Land Cruiser - 3X locked; 182K