I have been playing around with the Linux encrypted filesystem. The performance is quite good. On my test machine, a 2GHz Pentium 4 with 256MB RAM and a 500MB partition running AES128 on a loop device, it took 25 seconds to write 400MB from /dev/zero and sync. On the regular partition it took 18 seconds. I haven't yet thought about the security implications. However, I am sure that if an attacker gets root access on the computer, then he can sniff the keyboard and therefore bypass the encryption. Now, if the user loses his laptop and the attacker finds it and returns it, the user will need to somehow figure out what to do at that point. I think that it is obvious.