Originally posted by Davros
In this case, XOR is not the important factor in the encryption algorithm. Rather, it's how you generate the numbers (characters) to XOR with the data which is important.
Sounds like a stream cipher (RC4, et al). Some good block ciphers are Twofish, Serpent, Rijndael (AES). There is also always DES and Triple-DES, though its been replaced. A good link is www.counterpane.com

But in the original question, you talked about masking the data. That sounds more like steganography (data hiding) to me.