Here is a free way of zipping files in Mac OS X.

1. Go to Finder -> Application -> Terminal
2. now change directory to the plance you wan to zip and enter the command below:-
   • $ zip -e myzipfile.zip  file1.txt file2.txt

   [*]Once you enter the command, system will prompt you for password twice. Just enter the password you wish to set, and it’s done![*]You should see myzipfile.zip appear in the directory.

   • ** Default Archive Utility cant open password protected zip file. Refer to my How to open password protected zip file in Mac post.

   [*]Done. You just created a password protected zip file in Mac OS X

* If you cant create the password protected zip file, most of the time your zip utility doesn’t support encryption. Try to upgrade your zip utility and everything will work fine.

An even easier way, more secure way to compress files for Mac Only users is to create a password protected disk image (.dmg)

Follow these instructions to give it a shot. Your Mac OS X has everything you need to do this for free.

Go to Finder -> Applications -> Utilities -> Disk Utility

Click on New Image

Add Settings (current image below shows the settings I use)

You will get prompted to enter a password (the longer the password, the more secure it is and less likely someone can crack it)

Once you enter a password and click OK, you will see the progress as shown here

Then you will see it mounted on the left of your Finder just like your USB Keyfob or when you open a .dmg, now just copy the files you like to it.