You can use TrueCrypt or special apps to encrypt your sensitive data stored on Dropbox, but for greater accessibility and reduced bandwidth consumption, another alternative is to use a password-protected, encrypted zip file in Dropbox.
While TrueCrypt is one of our favourite encryption tools, an encrypted zip file has the same advantages while also being more easily browsable from both desktop and mobile platforms. 7-Zip is an open source archiver for Windows that Lifehacker readers are keen on, but you can also get AES encryption for your files with WinRAR (128-bit, though, not 256-bit, like 7-Zip) or other file encryption tools.
Just zip your sensitive files and make sure you choose to password-protect and encrypt them, then add to your Dropbox folder for more security. Another benefit is that while TrueCrypt requires you to create a container of a set size (with wasted space), with a zipped file, you'll get a smaller file and, therefore, less syncing overhead. Thanks Christopher!