In the three Linux gaming benchmarks -- Enemy Territory, Doom 3, and Enemy Territory: Quake Wars -- the encrypted LVM had little impact on the frame-rate performance. In Doom 3 and ET: Quake Wars the frame-rate had dropped by just a couple frames when dm-crypt was in use. The biggest drop was with ET: Quake Wars, which equated to 2.9 frames or about a 10% drop in performance. When it came to encoding a WAV file to MP3 format with LAME and using Gzip compression on a 745MB file, the performance drop was small yet noticeable. In our last benchmark, which is the most disk intensive, which was copying 364 JPEG images amounting to 1.3GB in disk space from a Corsair Flash Voyager GT drive over to the hard drive, the performance cost of using an encrypted LVM was at about 7%.
Depending upon the situation, the performance impact of using dm-crypt will vary, but for mobile users with sensitive or just personal information, hard disk encryption is becoming a necessity and its benefits should out weigh the small performance impact. It's unfortunate that encryption support hasn't reached the Ubuntu Ubiquity LiveCD installer in time for Ubuntu 8.04 LTS, but hopefully it will be accomplished for Ubuntu 8.10. Ideally for this desktop encryption they will use Cryptsetup with LUKS support.