We are using Cloudfogger to encrypt the files and specify who they can be shared with, then using Dropbox to share the files.
So first things first, install Cloudfogger and Dropbox and sign up for the accounts.
Find the file you want to encrypt and share.
With Cloudfogger Version 1.1.1291 installed and running, right click the file you want to share, and choose "Cloudfogger > Fogg and Share" and type in the email of whom you want to share it with then click "Add" then "OK". It will convert the file into one that looks like a green shield with a white check mark.
That was the encrypting, now for the sharing.
Make a new folder in your Dropbox named whatever you would like. Then right click that folder and choose "Dropbox > Share this Folder..."; this should cause the Dropbox website to open up where you can enter the email address of the Dropbox user you would like to share it with.
Place the file you encrypted (the one that was changed into a green check mark) into this folder.
Friend tells you they are prompted for a password when they try to open the file? Right click on the file and choose "Cloudfoggere > Manage Shares" and add their email address in.
If you sign up for Dropbox with my referral link http://db.tt/D5BQcbf it will give me a little more space for free, and I'd appreciate it :-) Thanks!