I assume you using Visa or 7 on a 64-bit OS. If so, then you have a little work to do.
Why is this? Because of DRM and FreeOTFE doesn't want to pay (or play Microsoft's game).
See http://www.freeotfe.org/docs/Main/impact_of_kernel_driver_signing.htm for details.
Bottom line, the sites suggest you do the following (taken from the site):
1. Open an elevated command prompt by either:
-Clicking the "Start" button on the Windows taskbar, type CMD in the search box, and then press
-Locating "cmd.exe" under C:\Windows\System32 in Windows Explorer, rightclicking on this executable and selecting "Run as Administrator" from the context menu
2. Click "continue" or enter the administrator's password as appropriate and click "OK", when asked for permission to continue.
3. In the command prompt window which appears, type:
bcdedit.exe /set TESTSIGNING ON
Reboot the PC
This method is probably the best solution, and allows FreeOTFE to run correctly. However, it does have a trivial side effect: The words "Test Mode" are shown in the four corners of the Desktop wallpaper after rebooting.
Goto the site for full details or use another encrypting program. I recommend TrueCrypt.
The choice is yours.