Well, if you're going to buy Panther or a new machine, OS 10.3 will have a built-in file encryption system, right into the OS. "File Safe" or some such. The main benefit here is that it's based on your login password.
PGP is popular, or at least it was, and I think it's freeware. I know it's used a lot for email, but surely it has the ability to encrypt a file.
Just out of curiousity, why are you encrypting it? Are you going to store the CD in a public place?