I use truecrypt in AES mode too, it is very fast on modern processes (other encryption methods are much slower). I hear good things about bitlocker too but I trust and like the performance, history open source nature and extra features of Truecrypt more.
Both can encrypt your C: in place (i.e. whilst you use the PC) without affecting data although you can choose to let Truecrypt format instead if you wish.
Speaking specifically about Truecrypt, there are several modes of operation:
Encrypt entire drives. Require a password to access (or to boot) from. This is the easiest and safest form because literally everything is encrypted and if you have a good, long password is essentially uncrackable.
Encrypt portable drives. Useful for removable drives.
Create a Specific Encryption Container. Create an encrypted folder instead of encrypting the entire drive. Useful if you only need to protect 'my documents' or similar however it will not encrypt other accessed areas like temp files so it isn't fully secure.
Another great method is Hidden Encryption. This encrypts a drive with 2 passwords. At the password prompt entering password 1 gains access to the drive with a hidden area remaining unseeable. Entering password 2 gives access to the hidden section. This is also known as the plausable deniability method. You can reveal one password which 'apparently' accesses the drive but actually still hides another folder which appears to be written with random data as the headers are not revealed.
It is worth noting that encryption is not perfect by itself. The PC can still be physically accessed if you leave it on with the passwords entered...so either don't store sensitive info on the PC or otherwise ensure that you turn off the PC when you leave it.
Have a read of this stuff:
http://www.truecrypt.org/docs/
