What is covered by "Encrypt phone"? On Ice Cream Sandwich (CyanogenMod 9), Under Settings &gt; Security there is an option to "Encrypt phone". I understand that this will require me to provide a PIN whenever I start up my phone. But what wasn't explained was if it covers the micro SD data as well?

I want to make it so that in case my phone gets stolen, the thief won't be able to simply get my micro SD card and pop it in to a card reader and view its contents, some of which may be sensitive.
Encrypt phone only encrypts the /data partition.

Encrypting the SD card is a separate function and isn't implemented in stock android.  Some manufacturers (I know Motorola and Samsung do) extend the encryption (optionally.  Where you find "encrypt phone", you'll also find an "encrypt SD card" option) to the SD card.  I can't determine whether cyanogenmod implements such a function or if it may be device-specific.