Encryption isn't a "Who really does it"... it's more of a "Who's dumb enough to not have some sort of encryption" ...

Truecrypt is definitely great... I'm also a big fan of GPG and PGP....

To what degree are things encrypted... That depends..

I have encrypted drives in some machines... in others I have "containers" or as Bruce pointed out encrypted folders...

As for the encryption complexity... I have some files that are encrypted twice with two encryption algorithms and two unique passwords... both betwen 40-50 characters.... I have others that are zip files with passwords... not necessarily encryption.. but it does the trick sometimes....

It's really a choice in security... some level is a must.. but the level you pick is unique to your data.