You will be happy to know this is an actual product, http://www.cryptcd.com/
it has home, pro, government and forensic editions. they encrypt and scramble your files into fake data and they have a special viewer that you use to view the files. One of the kool features is you can set it to not allow export from the disc and you can have it remove traces after you close the viewer.
It has many decoy options and customized screen making so you can pretend its software and the password is really a serial
or whatever you can come up with, imagination is the limit.
Although i think it would be easier & more interesting to have something that unpacks to a ram drive i would like to see how that would work out ^_^ because i'm not totally sure how cryptcd keeps the traces off your drive unless it stores reads them right from teh cd and decodes while in ram but not on a ram drive *confused* XD
anyways good way to start a monday ttyl all