If you don't feel like downloading extra software or diving into the command line, here's an easy way to hide more sensitive files within DOCX files.
Sure, DOCX files were a thorn in the world's side for a few years, since Office 2007 users saved in that format by default while everyone else ignored their software updates, but they make hiding files super easy. Since DOCX files are just archives, you can easily unzip them, add your secret file, and then rezip with something like 7-Zip. Office will give you an error if you try to open the document, but if its only purpose is to look inconspicuous, it doesn't really matter. You can just use a blank document with a boring title, and no one will be the wiser.
If you absolutely need to use an important document to hide files (though we don't know why you would), you can alternatively use Irongeek's Office XML Steganography Tool, which will exit the XML file and allow Office to open the document. Note that this doesn't necessarily work with all file types, which is just another reason you should do it manually instead.
Hiding files within documents is nice because it's quick and doesn't draw any attention to the files the way encryption might. Plus, now you have a use for that gosh darn DOCX format that's annoyed you for three years. Also note that if you don't use Microsoft Office, this trick should work with any other file type that is actually an archive, such as applications in Mac OS X.
Hacking Tip: Hide Secret Files in Plain Sight [Tinkernut]