What is FileVault?
A feature built in to in Mac OS X, FileVault provides 128bit AES encryption of all files located within your home directory. After enabling FileVault (screenshot) verify that all of your applications are stored in a folder outside of your Home directory. For example, if you have an application on your Desktop, place it in your /Applications folder. This will mitigate the typical performance losses associated with encryption. Rest assured that if your Macintosh is stolen, no one will be able to peruse through your personal data!