I am currently running Windows 7 RC x64 on my home system, and am interested in encrypting my hard drive. I've heard good things about TrueCrypt, but am curious what other folks might suggest. I primarily use my system for software development, so am concerned about any system performance degradation that encryption might introduce.
TrueCrypt is the de facto standard.
Free open-source disk encryption software for Windows Vista/XP, Mac OS X, and Linux.
The following features are planned to be implemented in future versions:
Full support for Windows 7
As you mentioned, there's TrueCrypt.
There's also PGP Whole Disk Encryption.
If you purchase Windows 7 Ultimate, you'll also have BitLocker built in, which is one of the few compelling features of Ultimate.
I use Dekart private disk. It ships with AES 256-bit encryption and can be used from a memory stick.