With Truecrypt (btw - visit
http://www.truecrypt.org to get it) you create virtual disks the contents of which are contained in a single file (there are other options but never mind for now). So using Truecrypt either installed or portable, you need to create such a file. The size of the file and the encryption method is up to you. Then, from within Truecrypt you mount the drive by selecting a drive letter for it and the encrypted file that you've created. That drive then is available in your computer just like any other drive - lets say it's drive D:.
After you set this up, you install Dropbox normally but specify a folder inside this D: drive (or just the drive itself) as the folder you want to keep your Dropbox file in. And that's pretty much it.
When you want to leave, you close Dropbox first (since it has open file handles and locks its folders) and then you dismount the drive using Truecrypt. Once you do this, all that is left is a simple file that noone can open.
I've used this method with the exception of encrypting a full partition instead of creating a virtual drive file. But it's the same result.