Hide Files & Messages inside Images

Using the command prompt in Windows
This one's quite easy. Create an archive file (i.e a Zip or Rar file) which contains the files you want to hide.
Our aim is to hide this archive file inside an image. Let's assume secretfiles.zip is the archive file and mypicture.jpg is the picture file which will be used to hide the archive.

Now open the command prompt and use the following command:
copy /b mypicture.jpg + secretfiles.zip new.jpg

The above command will create a new image file named new.jpg, which contains secretfiles.zip.
Opening new.jpg will only display the image from the original mypicture.jpg file, so the zip file stays hidden. However, to access the archive, you'll have the open the new.jpg file with programs like Winzip,Winrar,7-zip etc.

This trick can also be used with other image formats like png, gif, tif etc. Additionally, the zip or rar archives can be encrypted(password protected), thereby making it difficult to retrieve even if one knows an image contains these files.