What about encrypting your entire hard drive? And are there any downsides to so doing?
You can't encrypt your entire hard drive (unless you can boot from a CD or something) -- the system needs to run the operating system before it can get to the point of starting the crypto software.
Other than that, the downside is that you introduce some extra overhead into file access to run the encryption/decryption/wiping routines. It probably won't be noticeable unless you have a slow computer or lousy crypto software.