Can you hide files in plain sight? Apparently you can, using this software from PCMesh.
The article points out that this is much weaker than stout encryption, but that may not be the point, if all you want to do is hide your wife and your love letters from the kids, or some other lightweight security chore. This is probably worth checking out, for a number of users.
Personally, I will stick with encryption for the little bit of use I have for such techniques. I can spare the time it takes and I like the certaintly that 2048 bit encryption will not be realistically breakable any time soon. I only have just over 59 megabytes encrypted, which eases the burden considerably. I really don't have that much to hide.
Even so; this is an interesting development and if it interests you, the article has a link to the company's page.