I'm looking for something along the lines of a plug-in that will easily allow one to encrypt a specific folder within Outlook (or Outlook Express, Thunderbird, etc). Does anyone have a free, versatile, easy-to-use recommendation?

To be clear, you want to encrypt the on-disk storage of the email, right? If so, you could use Windows' built-in Encrypting File System support.

That won't work easily with Outlook if you only want encrypt a single folder, as all mail within an account is stored in a single file. Thunderbird however has a separate file for each folder, so you could encrypt just a single folder using Windows encryption and Thunderbird.

I can't remember whether Outlook Express uses a single file or not.

Be aware that XP Home does not have file encryption built in.

You can tell Outlook to use multiple PST files and also enable some sort of encryption. I've no idea how secure it is however.