Is it possible to encrypt home folder on windows 7?
TrueCrypt provides the ability to do a pre-boot system encryption. Maybe thats what you're looking for.
I found this article on Microsoft.com, it was written for Vista, so should still work on 7.
Right-click the folder or file you want to encrypt, and then click Properties.
Click the General tab, and then click Advanced.
Select the Encrypt contents to secure data check box, and then click OK.
It is possible to encrypt the entire hard drive (including the home folder) using the BitLocker feature. This is only available in Windows 7 Ultimate.
If by 'home folder' you mean user's data folder (C:\Users\username), that can probably be done in other versions.