Options for Data Encryption in SQL Server 2008 R2 Standard Edition? I'm helping a friend with setting up encryption of data on SQL Server 2008 R2 Standard edition. Upon original research I thought I could use 
TDE but did not realize that it was only available for Enterprise or DataCenter versions of SQL Servers. Upon further research into SQL Server 2008 R2 features I saw that it does allow for "Data encryption and key management" but I'm not sure what it means or how to implement it.

What is the most efficient and low cost method for data encryption? Should I do something through SQL Server or just use third party tools to encrypt the whole volume where DB and backups are? Also if someone can point to a way to use "Data encryption" that comes as feature in standard edition I would really appreciate. Every time I search for encryption on sql server I keep ending up on how to use TDE and in current scenario it is not feasible for the size of business to purchase Enterprise Edition. 

Reason for encryption - HIPAA Compliance. If access is gain to file system for database or backups, data is encrypted and can not be of any use. This could include physical access to the machine or access through local admin.
Since you are using Standard Edition, you cant use TDE. So other options are 

Using encryption keys at instance/database level :

SQL Server has two kinds of keys: symmetric and asymmetric. Symmetric keys use the same password to encrypt and decrypt data. Asymmetric keys use one password to encrypt data (called the public key) and another to decrypt data (called the private key).

SQL Server has two primary applications for keys: a service master key (SMK) generated on and for a SQL Server instance, and a database master key (DMK) used for a database.

Also, you can have encryption at column level by creating a MASTER KEY ENCRYPTION along with CREATE CERTIFICATE and then CREATE SYMMETRIC KEY.

An example of how this can be done is described at Encrypt a Column of Data

Reference : SQL Server and Database Encryption Keys (Database Engine)

At Drive level :

Using BitLocker as it is a Drive Encryption data protection feature available Windows Server 2008 R2. Refer to : BitLocker Drive Encryption Overview There are many opensource or third party software to do the same job but at additional cost.

Note: The most important bit is ALWAYS backup your encryption keys.

You can use third party software like Redgate's sql backup which allows you to encrypt backups using passwords.

Depending on what level you need encryption will determine if it is worth upgrading to enterprise edition or not. You have to evaluate native TDE encryption vs encryption keys and certificates vs open source vs disk encryption.