I have my home dir on a separate disk, and encrypted on ubuntu linux.
I also have my swap partition encrypted and temporary maps also.
There is no significant performance loss except when dealing with large files. (example: when downloading a DVD with torrent, and the application is allocating it's space, encrypting the data at the same time. Application freezes for something like 30-60 seconds)
A good solution is also disk encryption some laptops provide. It can be enabled from bios.
Maybe a combination of the two (software, hardware) would be safer, using 2 separate passwords.
Some laptops still haven't been cracked.
Also a good idea is to have passwords as long as possible and with uppercase, lowercase letters, signs, numbers.....
Never use dictionary words, birthday dates, names...
for example:
windows login passwords with just 8 signs (random lowercase letters and some numbers) can be decrypted within 5 minutes using special software from boot cd.