Computer security is largely a matter of raising the bar. If the Men In Black want to know what you’ve got on there, they WILL find out. Your job is to keep the merely curious out–to make it that much harder to glean useful info.
[QUOTE=kanicbird]
Since I am using a laptop more and more, and traveling with it, I would like to know if my current security methods are effective and any other inexpensive (free) security measures that I should do, which also don’t effect the ease of use.
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Another of our truisms, in computer security, is that physical access trumps all. As you can imagine, laptops are especially vulnerable to this. This means that there’s a limit to practical measures you can take.
This is great! Continue doing this; don’t forget to remove the flash drive when you’re done; don’t forget the password; etc. Honestly, this is pretty much the best measure you could take.
But–pardon me if I am being exceptionally dense–what does “the info is backed up on my desktop” mean? Your desktop computer, as opposed to your laptop? Or on your laptop’s physical drive? If the latter, then the flash drive trick isn’t doing you any good.
Theoretically, no. In practice, yes. (See above re: physical access)
For e-mails: What’s not on the computer can’t be read. Consider keeping all e-mails on the server (i.e. not downloading them) and reading them there, probably via web interface. Note that this means that you must have Internet access in order to even read your e-mail.
If you want to keep the e-mails on your computer, you might consider finding out which folder XP uses to store downloaded mail, and turning it into a symlink (fake folder that points elsewhere) to an encrypted volume. Note that I’ve never actually tried this. 
E-mail travels in the clear, so you’ll have to connect to the mail server through a VPN to avoid getting the mail intercepted in transit.
For usernames and passwords: go into your web browser’s preferences and tell it to clear the cache when you close the browser. Firefox has a handy feature where the passwords are themselves protected by a password, which does provide some measure of protection (use a strong password, of course, and don’t repeat one you’ve used elsewhere). BUT BE CAREFUL! If you DON’T set the master password, Firefox stores them in the clear.
One final tip: on a wireless network, try to have the final link with your computer be wired. If this isn’t possible, then don’t do anything sensitive, as there’s a possibility of the connection being monitored. Online banking in coffee shops is Right Out.
Hope this helps…