There are several popular tools for obfuscation, including Dotfuscation, which has a "light" version that ships with Visual Studio 2005 and 2008. They have a Pro version that does more than just variable and function name renaming. However, the code is still viewable, it is just scrambled a bit to make it harder to read and grok the logic flow of the software.
Another technique is to use other programs that will encrypt the program, and decrypt it at runtime. However, this is not a perfect solution either. In fact, there is no perfect solution that I am aware of that will prevent a determined engineer from reverse engineering the software, if enough time and effort is applied to it.
What it really comes down to is determining the level of protection that will make it sufficiently difficult to dissuade the casual hacker, and make it as expensive to reverse engineer as you can, so at least the reverse engineering comes at a cost in either time or money, or ideally, both. The more expensive the reverse engineering costs, the fewer number of individuals that will be willing to put in the effort. And that is the big point to obfuscation.
Some think that using a compiler like the C++ compiler that compiles to native code will prevent this sort of reverse engineering, but it doesn't. A good disassembler will allow even pure binary executables to be reverse engineered, so therefore, a perfect solution does not exist. If the computer can read it and execute it, then the memory the computer is using can be scanned and tracked, bypassing all attempts to encrypt, obfuscate, or any other means of keeping your code out of the hands of a determined engineer.
