US District Judge Robert Blackburn has ordered Ramona Camelia Fricosu to decrypt the contents of her laptop. This to enable the US District Attorney's office to sort through, and use, any of the contents in prosecution of her and her husband. Both are accused of financial fraud.
Judge Blackburn accepted the argument that to rule in favor of Ms. Fricosu's Fifth Amendment claim would be, in the words of Assistant US District Attorney Patricia Davies, "a concession to her and potential criminals (be it in child exploitation, national security, terrorism, financial crimes or drug trafficking cases) that encrypting all inculpatory digital evidence will serve to defeat the efforts of law enforcement officers to obtain such evidence through judicially authorized search warrants, and thus make their prosecution impossible."
Personally, to me, that says "We don't have a case. We don't have evidence. We need you to be a nice guy and help us put you away. We're that incompetent."
With the passage of the 2012 NDAA, many will find themselves under increasing scrutiny and without constitutional protections.
Links to pertinent documentation can be found in the Wired Magazine article, "Judge Orders Defendant to Decrypt Laptop"
So, what do you need to do ...... just in case? It doesn't have to be the cops. Someone could steal your hardware just as easily and crack any administrative passwords. Then they would have a treasure trove of information. Especially if you avail yourself of online shopping, bill paying, and online tax preparation. It could also place your online persona (Twitter, Facebook, etc) potentially at risk.
I highly recommend TrueCrypt. It is a free, open source, on the fly (encrypting and decrypting as your machine runs) encryption program. It is able to use multi-core processors and works on Windows, Linux, and MAC operating systems. Check out the FAQ to learn many of its features.
The story circulates that the FBI tried for a year to try and crack a TrueCrypt encrypted drive, and apparently gave up.
One feature that may very well save your bacon is the ability to set up hidden volumes and hidden operating systems. This allows you to create a very innocuous system that you can boot to and show to whomever wants to see that there ain't nothing there. The system with all of the things you wish to remain hidden will stay hidden.