Here's some code I wrote to encrypt/decrypt a string. The encrypted string is Base64 encoded for ease of serialization to XML, etc. You could easily convert this code to work directly with byte arrays instead of strings.
/// <summary>
/// Create and initialize a crypto algorithm.
/// </summary>
/// <param name="password">The password.</param>
private static SymmetricAlgorithm GetAlgorithm(string password)
{
    var algorithm = Rijndael.Create();
    var rdb = new Rfc2898DeriveBytes(password, new byte[] {
        0x53,0x6f,0x64,0x69,0x75,0x6d,0x20,             // salty goodness
        0x43,0x68,0x6c,0x6f,0x72,0x69,0x64,0x65
    });
    algorithm.Padding = PaddingMode.ISO10126;
    algorithm.Key = rdb.GetBytes(32);
    algorithm.IV = rdb.GetBytes(16);
    return algorithm;
}
/// <summary>
/// Encrypts a string with a given password.
/// </summary>
/// <param name="clearText">The clear text.</param>
/// <param name="password">The password.</param>
public static string EncryptString(string clearText, string password)
{
    var algorithm = GetAlgorithm(password);
    var encryptor = algorithm.CreateEncryptor();
    var clearBytes = Encoding.Unicode.GetBytes(clearText);
    using (var ms = new MemoryStream())
    using (var cs = new CryptoStream(ms, encryptor, CryptoStreamMode.Write))
    {
        cs.Write(clearBytes, 0, clearBytes.Length);
        cs.Close();
        return Convert.ToBase64String(ms.ToArray());
    }
}
/// <summary>
/// Decrypts a string using a given password.
/// </summary>
/// <param name="cipherText">The cipher text.</param>
/// <param name="password">The password.</param>
public static string DecryptString(string cipherText, string password)
{
    var algorithm = GetAlgorithm(password);
    var decryptor = algorithm.CreateDecryptor();
    var cipherBytes = Convert.FromBase64String(cipherText);
    using (var ms = new MemoryStream())
    using (var cs = new CryptoStream(ms, decryptor, CryptoStreamMode.Write))
    {
        cs.Write(cipherBytes, 0, cipherBytes.Length);
        cs.Close();
        return Encoding.Unicode.GetString(ms.ToArray());
    }
}