You may have heard about the excellent utility TrueCrypt which create encrypted virtual drives or partitions!?  But now it has been released in a version 5.0a which should support the underlying OS (that is transparent bootup encryption of the system drive).  Excellent..  I have not had time to check it, but if it works its utterly excellent (and best of all FREEEEEEEEEE!).

Recovery is as I read it achieved via an ISO boot image created upon installation, but again I have not checked this.