I have been searching for a while for information about encrypting filesystems. The thing is that everything is really fuzzy, I am not sure but it seems that most of the guides just tell me how to create a large file and use it as a filesystem.

I want it simple. I have an external harddrive and I want to reformat it using ext3. I want to use dm-crypt (heard that it was better then cryptoloop) and mount it with a password. I would really like it if it could automount at boot and ask for password.

Anyone know about a good way to do this, and I need explaination about everything because I am totally lost here. Feel like there is no real structure in this area. :/

This is a good place to start: http://deb.riseup.net/storage/encryption/dmcrypt/

Its Debian specific, but isn't hard to adapt to other distros. The guide tells you to use apt-get to install dmsetup and cryptsetup, but you can just d/l and install them your self. I used the same procedure to setup an ancrypted volume at home without any problems.

Yeah, I found that exact site and it was great. Maybe because I use Debian on that system so it wasn't too hard. But it was simple and explained everything good enough. I haven't yet tested to reboot and see if it asks for password and mounts correctly, but I sure hope so.