That script he has on the linked page just sets up a loopback device and then encrypts that. I don't think it's really intended to be used to encrypt your entire filesystem. (First question that springs to mind is, why? protect the open source n900 firmware?)

but really I think he intends it to be used to store the naked pictures your girlfriend MMS's you or the photos you've been saving of that girl you've been stalking on facebook.

you know, stuff you don't use all the time.