Apple's FileVault provides 128-bit AES encryption for your home directory on Mac OS X 10.4 Tiger (and 10.3 Panther) systems. The data files in a user's home directory are encrypted and decrypted on the fly once the user has logged on to the system. This provides a nice transparency that once setup, the user only types in the his or her password when they log on and then can use the files without needing to worry about the encryption. Since the decryption key is stored in the user's keychain, an account that has had its password reset by an Administrator will not be able to access the encrpyted files unless a Master Password has been set for the machine. Therefor, we strongly recommend setting a Master Password and putting that in a safe place. Files not stored in the users home directory are not protected by FileVault.
A couple links with more information about FileVault:
We are working on instructions for Setting up Apple's FileVault and are interested in the difficulty or ease of setup and use.