One of the bywords of international travel is that "you have no rights at the border." Customs agents can search anything, take anything, degrade you, and delay or block you. In accordance with this time-honored principle, the Ninth Circuit Court has held that customs agents can rifle all the files on your computer just because they feel like it. It doesn't matter that you're a US citizen; the Fourth Amendment doesn't apply when you're coming back to the so-called "land of the free."
If you don't want to be subjected to this, the best solution is not to travel to other countries. You can leave your cell phone, laptop computer, and PDA behind, but the government can still do any number of other things to you. Besides, this often isn't an option for business travelers. An EFF article discusses some other options. You can encrypt your drive, but then the government can simply steal your computer or refuse to let you into the country. The article suggests having your employer encrypt the business data with a password you don't have, and having an unencrypted account for yourself. This won't stop the custom agents from seizing your computer as punishment, but if you act innocent enough it may confuse many of them so that they won't give you trouble. A note on letterhead saying that company policy prohibits you from having access to the data may help.
Another technique, not mentioned, would be to put confidential business data in a thumb drive and toss it in your suitcase with your underwear.