JUNE 2015 UPDATE:
Shortly after writing this article, Truecrypt announced it would no longer be maintained, which controversially happened during an public audit. One of the advantages of being open source, is anyone can take the code and fork it, which is to say modify it and ideally improve upon it. Ciphershed and VeraCrypt (are two such forks. There are also commercial solutions, such as Microsoft's Bitlocker and Apple's FileFault, but as they are closed source, there is no way to verify they don't have backdoors. If you're using an open source operating system (including Android) check out dm-crypt (block encryption) and eCryptfs (per file encryption).
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Thanks to Edward Snowden, those considered conspiracy theorists about the surveillance state were vindicated last year. As a result of the disclosures, I'm often asked what I think about this, and what we should do to change things. If you're feeling really proactive, there are groups like OpenMedia and the B.C. Civil Liberties Association (I am on the privacy and access committee) that are actively trying to hold the government to account to stop warrantless spying, and instead help protect us beyond the rhetoric of security theatre.
What I would like to offer though, are the best tools you can use to protect yourself online from surveillance. I will talk about three free, open source tools that you can download and be using in minutes. The fact all the tools I recommend are open source, means you don't have to trust me, you can download the source code and look at it yourself before using it. They are absolutely required for protecting your personal, and business data from unauthorized eavesdropping, which happens by default for anything you do online.
The first tool I recommend was initially funded by the U.S. government, and is the most popular for protecting yourself online. It's called the tor project and it helps protect you from network surveillance and traffic analysis. They even have the tor browser bundle for download on their website, that allows you to simply and quickly be surfing the internet anonymously.
The second tool has been out for over a decade, and it's called GNU Privacy Guard, or gpg. It allows you you encrypt and sign your data and communication, most notably your emails.
For some reason most people think email is only visible to the sender and recipient, when in fact it travels around the internet more like a postcard for anyone to read. Consider using gpg like putting your digital or electronic mail in an envelope. If you use an email program like Thunderbird, there is a plugin called Enigmail that works great for using gpg to encrypt and decrypt your emails. Emails are not secret or private, if they're not encrypted.
The third tool I will recommend here is also for file encryption, but it can also be used for disk encryption. It's called Truecrypt, and can be used to encrypt your laptop hard drive, a USB stick, or a directory/files on your computer. Think about how worth it -- it was to take a few minutes to install this, the next time you read about a stolen laptop or USB stick in the news. If they had followed these steps, the data on the drives would have been protected!
Each of these tools will have a bit of a learning curve, but within an hour you could be using all three, and will be more secure than over 95 per cent of Internet users out there today. You can also search online for tutorials on each of these to get yourself started with each of these if you get stuck, or you can ask here and I will try to help.