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I can't find a definite answer on this so I figured I'd ask.

How would I create a Java program that would intercept and encrypt (preferably with AES) all internet traffic leaving the computer? I think the biggest issue would be catching and encrypting everything, which also is the part I'm not sure how to do.

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    Why not just use a VPN client? Who's going to decrypt the traffic? – Mark Byers May 08 '12 at 20:39
  • You can create your own encrypted virtual network *over the internet* though. You might want to try [Hamachi](https://secure.logmein.com/products/hamachi/), a distributed VPN solution. Note that I personally haven't used or verified the security of that solution. – Maarten Bodewes May 08 '12 at 21:49

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If you auto encrypt all the traffic leaving the machine, how does the server on the reserver know how to decrypt it?

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    You should accept my answer so I can collect badges related to answering (rather than asking) questions. :-) –  May 08 '12 at 21:30
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You need also a programm which will decrypt the traffic on the server side. One easy way is to use the Tor network. https://www.torproject.org/ Other approach is to use https-anywhere which provide force where possible to use https https://www.eff.org/https-everywhere