Steganography sometimes is used when encryption is not permitted. Or, more commonly, steganography is used to supplement encryption. An encrypted file may still hide information using steganography, so even if the encrypted file is deciphered, the hidden message is not seen.

Special software is needed for steganography, and there are freeware versions available at any good download site.

Steganography (literally meaning covered writing) dates back to ancient Greece, where common practices consisted of etching messages in wooden tablets and covering them with wax, and tattooing a shaved messenger's head, letting his hair grow back, then shaving it again when he arrived at his contact point.

DRM Watch
Analysis of digital rights management technology.

Steganography
Focuses on the use of images in steganography. Provides a brief history with illustrations of some methods for implementing steganography, and compares available software providing steganographic services.

Yahoo!'s steganography page
Yahoo!'s directory of steganography.