Encrytion on Windows
There are a variety of Windows-based tools for creating an encrypted volume on a USB stick, but our favorite is the free, open-source TrueCrypt. TrueCrypt uses on-the-fly encryption, which means that data is automatically encrypted and decrypted without you needing to do anything other than enter a password or possess the right keyfile.
Download TrueCrypt
Encryption on Mac OS X
TrueCrypt offers a Mac version as well, but OS X actually has a nice built-in encryption tool you can use right out of the box.
To get started, just plug in your USB stick and open up Disk Utility (you'll find it in the Utilities folder inside your Applications folder).
In Disk Utility head to File >> New >> Blank Disk Image. Select your USB stick as the destination and choose one of the encryption options. You can also set the size of the volume, number of partitions and the format.

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