Q:

Easyest way to setup encrypted volume

What is the easyest way to set encrypted volume under linux?
Basically, what I want is to have fixed size file in my home folder. When I mount it and type password, it should appear as regular folder. I should also be able to umount it.
If it would be possible to prevend other users, including root, to access it while mounted, it would be a bonus.
It shouldn't depend on any kernel featueres or configuration, cause I want to be able to mount it later on another computer.

A:

Your last requirement screams 'Truecrypt'. There are some other options (like EncFS and luks / cryptsetup), but I wouldn't exactly call those 'easy' if you do not set them up during installation. A Truecrypt volume is most likely not a partition, it would be a file, but from your question, I guess that would be ok. 
If mounted, root would be able to read it though, and I doubt a solution exists where root would be banned from reading the mounted partition / file. After all, root is God. I suppose you would be able to mimic what you want on a system with SELinux in strict mode, but building such a system is opening up a huge can of worms by itself.
So: Truecrypt.

