What are my options for full system (or at least home directory) encryption?
Mac OS X comes with FileVault for encrypting your home directory. There isn't a whole lot of customization for it, but it does its job. There are a few downsides, though:


FileVault does not play well with Time Machine backups. Time Machine can only back up the FileVault encrypted disk image when the user is logged out.
As FileVault runs it tends to slowly consume disk space. This space is reclaimed at logout, but it can cause problems if your drive is nearly full.


These downsides are the result of FileVault being implemented as an encrypted disk image that is then mounted at login. However, as long as you make sure you regularly log out of your machine they shouldn't present that much of an issue.

It does appear that TrueCrypt is available for Mac OS X, but I've never used it and don't know how well it works.