Not to beat it to death, more of a sales pitch.....Save your time, and go with the encrypted loopback filesystem. It is the solution adopted by the experts. The TrueCrypt mentioned earlier is nice, but you can easily roll-your own on linux, and some distros like SuSE, have the option to use encrypted filesystems at the install process. All you really need is a patched version of the losetup utility ( the utility used in "mount -o loop" ) that handles encryption. You can mount your enc partiton at boot, with the mount options in /etc/fstab, or you can mount them later after boot.

With the enc filesystems, and even encrypted swap spaces, (you can change between different swap spaces any time), you can be sure your stuff is scrambled and not directly readable. At that point, you need to worry about them watching your keyboard, or intercepting your keypress signals somehow. You can then run something like Tk Virtual Keyboard to hide your text and passwords from the leaky keyboard. It really all boils down to who are you trying to hide stuff from? Your wife, business competitors, thieves, Dept. of Homeland Security? :-)

You know encrypted filesystems work, because there already have been numerous cases where people are under court orders to reveal the passwords to their encrypted filesystems. Investigators can get by root and bios passwords without any trouble and see your stuff, but all they see is jibberish when they look at the enc filesystem.

Also you cannot be sure what is left on a non-encrypted filesystem, even after you force an erasure. Maybe it left something on swap? Maybe something was left in the clear somewhere.....can you be sure? Only on an encrypted filesystem can you be sure and sleep good at night. You can also run the whole thing on a USB key, and keep it in your pocket, for a feeling of extra safeness.