The options available are encrypting a Private directory within each user's home directory using ecryptfs, using Truecrypt or using luks and dm-crypt. Each of these have their benefits and drawbacks.
Using ecryptfs and a Private directory is easy to setup after system installation on a per-user basis but it's not enabled by default most of the time, it won't protect anything being written outside of that Private directory (including /tmp, /var and swap). One of the major drawbacks is that it does nothing to encrypt the filenames being used - so people who gain access can see the names of the files, just not what they contain. There is also some concern that if the same login and ecryptfs password is being used then the weak point is the login password which can be fairly quick to crack.
Truecrypt is cross-platform, meaning you can create encrypted partitions that are readable in both Linux and Windows. It also offers plausible deniability. However, it's not terribly easy to setup and use - the gui is pretty scary if you don't know what you're doing.
Luks and an encrypted lvm is the best way of ensuring everything is nicely encrypted. The main downside is you can't really go back and add it after installation and you need the server or advanced install cd in order to enable it. Given that 10.04 LTS is coming up in the next month or so, my preferred option is to wait a few months and then do clean installs of that with encrypted LVM partitions.
