If you take your laptop on travel, or have nightmares about what would happen if someone stole your computer, disk encryption is for you. There are lots of software packages that create encrypted containers (i.e., encrypt only what is in the container).  However, with more and more information being stored in databases and
the registry, ensuring that all the sensitive information is encrypted becomes quite difficult. Full disk encryption avoids this problem.  Here is a list of packages that provide full disk encryption. FYI, I have not tested these.

http://www.full-disk-encryption.net/Full_Disc_Encryption.html

I’ve seen good reviews on the Utimaco, Guardian Edge, WinMagic and PointSec products.

The performance hit for encrypting should be between 5% and 10% for most people with relatively new computers.

Some caveats however. Before you encrypt your hard disk make sure you have good backups. I recommend both an image backup (e.g., like Norton Ghost or Drive Image XML) and file based backup. The reason is if an encrypted drive gets corrupted it is virtually impossible to fix, so you will need to recover from scratch.

If encrypting your whole disk is too scary consider encrypting a folder. The top free product is TrueCrypt and a well respected commercial product for enterprise installations is DESLock+.

Lastly, a number of disk drive manufacturers are starting to incorporate disk encryption technology. By 2008 I expect most laptops to have full disk encryption technology built in.