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If you are worried about such a situation, you might want to take a look at the TrueCrypt project at http://www.truecrypt.org/. Check the documentation about plausible deniability. Basically, according to the docs, an encrypted volume contains no signature, and no way to prove it is anything besides random data. You can also create hidden volumes inside encrypted volumes. So, if you are forced to decrypt the volume, you can have a few files in there that look like something you might want to protect, but the real info is still hidden.

I may not be explaining this perfectly, as I don't use this feature. Might be worth checking out though. Also, I think this product is only for Windows, but similar options are probably available for other systems.

I'm very interested to know if other people have experience with other encrypting file systems.

TrueCrypt seems excellent, however, the recent bug fixes look somewhat serious. Is TrueCrypt mature?

I use Truecrypt. It is free and open source. Provides much more flexibility and the encrypted source file(s) can be stored on any medium (network, flash, floppy, etc..) Sure it is not durectly integrated into the OS but for me, it strikes the perfect balance between security and piece of mind.