Hallo
I use loop-AES (
http://loop-aes.sourceforge.net/) and made good experience with it,
There is a very good README-file, just follow the instructions, it works
it means you have to patch your 2.4 kernel (not sure about 2.6), what is no problem just follow the loop-AES.README
loop-AES doesn't decrease your performance very much
To backup those data you could use (if your encrypted partition is hda4)
cat /dev/hda4 > /tmp/backup_hda4
and burn this file to a cdrom you can open it with any other system with loop-AES installed
If you are just one person using your computer it's no problem to encrypt your whole /home
then you get the password-question on boot-up.
Because I share my computer, i just encrypted my data and mail-configuration an mount this encrypted partitition after login.
Hope that helps