Using FileVault 2 on non-boot disk with moved home directory
You don't need to reformat your disk to enable encryption. To encrypt a drive on Lion, you can use the following command:

diskutil cs convert /Volumes/your_drive_name_here -passphrase


You’ll then be prompted for the passphrase you want to set and get output similar to what’s shown below:

computer name:~ username$ diskutil cs convert /Volumes/your_drive_name_here -passphrase
New passphrase for converted volume:
Confirm new passphrase:
Started CoreStorage operation on disk2s1 your_drive_name_here
Resizing disk to fit Core Storage headers
[ - 0%..10%.............................................. ]
Creating Core Storage Logical Volume Group
Attempting to unmount disk2s1
Switching disk2s1 to Core Storage
Waiting for Logical Volume to appear
Mounting Logical Volume
Core Storage LVG UUID: D1EAB2C3-EC21-41DA-AD60-75E1302E247B
Core Storage PV UUID: 991C89E9-A628-408C-AAFF-39A561FCB95C
Core Storage LV UUID: 36483526-6C2C-43FA-A4B7-6F503473F1C2
Core Storage disk: disk3
Finished CoreStorage operation on disk2s1 your_drive_name_here
Encryption in progress; use diskutil coreStorage list for status


You’ll want to leave the Mac up and running while the drive is encrypting, as the encryption process may fail if interrupted. To check on its progress, run the following command:

diskutil cs list


Check the list displayed for the name of the drive you’re encrypting. When you find it, look for Size (Converted):, as that will tell you how far along the encryption is.

Once the encryption is finished, it should report Conversion Status: Complete

For more information, see here.