There are several whole-disk encryption products on the market. I use PGP Disk's Whole Disk Encryption tool for two reasons. It's easy, and I trust both the company and the developers to write it securely. (Disclosure: I'm also on PGP Corp.'s Technical Advisory Board.)
Setup only takes a few minutes. After that, the program runs in the background. Everything works like before, and the performance degradation is negligible. Just make sure you choose a secure password -- PGP's encouragement of passphrases makes this much easier -- and you're secure against leaving your laptop in the airport or having it stolen out of your hotel room.
The reason you encrypt your entire disk, and not just key files, is so you don't have to worry about swap files, temp files, hibernation files, erased files, browser cookies or whatever. You don't need to enforce a complex policy about which files are important enough to be encrypted. And you have an easy answer to your boss or to the press if the computer is stolen: no problem; the laptop is encrypted.
PGP Disk can also encrypt external disks, which means you can also secure that USB memory device you've been using to transfer data from computer to computer. When I travel, I use a portable USB drive for backup. Those devices are getting physically smaller -- but larger in capacity -- every year, and by encrypting I don't have to worry about losing them.
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