Steganography is the art of hiding information. One form of this could be a small micro film or chip embedded within a normal everyday object such as a pen. While this sounds like fiction as commonly seen in spy movies, the US has recently warned that Canadian coins with tiny radio frequency transmitters hidden inside were discovered among high clearance government contractors http://www.foxnews.com/story/0,2933,243018,00.html.
From a software perspective there are many different ways to hide information. The most common and popular use of Steganography is hiding information within an image file. For example, if you are emailing a file called test.jpg, the mail client and mail server will encode the file as a binary image attachment, the operating system and any image browsing application will also consider a file named test.jpg has an image. However, there are many areas within the image file that could contain private information that will not be identifiable by a common application.
I have developed a small Perl based application for Digital Media protection that will hide information within a jpg image file. You can embed any object within the 'fake' image, it could be an important media file, sound or video file or any private document. The program will ask for a pass phrase that will be used to encrypt the contents prior to embedding it within the 'fake' image file. To extract the content you simply access the web page listed below and supply the pass phrase along with the 'fake' image file (containing the encrypted/embedded data), the media file will play within the web browser.
This application could easily be extended to provide Digital Rights Management (DRM) by applying a policy to the protected content - something to do when I have spare time. The policy could include expiration and portability rules.
Warning: If the JPG file containing the hidden data is saved by any image editing program, the embedded data is lost. It also may be obvious that the JPG file is much larger then the simple 'fake' image that is displayed, which could be a clue that the JPG file contains more than just a picture. Finally, without the pass phrase you will not be able to extract the hidden data, if you loose the pass phrase you will not be able to extract the data period - I can not help you.