Slashdot links to a howto on replacing Apple’s proprietary home folder encryption with a FUSE based, encrypted file system. The author explains the benefits and drawbacks as well as how to use a login hook to automate mounting and opening the secure volume.
The advantages are the opportunity to use stronger encryption, being able to back up data continuously rather than at logout, and using an open rather than a proprietary solution. The main disadvantage is that FileVault is more thoroughly tested and more likely to be reliable. For instance, EncFS at the moment has a known issue around use as a replacement home folder. To work around this, you’d need to have a separate folder as a mount point and manually link what you want to appear as if it is part of your home folder.
If you are an early adopter or a power user, this may be of interest to you regardless of the downsides. The ability to actually back up your protected data as you are working with it means the impact of a bug or crash is somewhat mitigated.