FileVault has worked well for me. I've used it ever since I got my 12" Powerbook and haven't noticed any glitches. The only time I notice anything is when I log out. It has to do some process of reclaiming space so logging out takes a smidgen longer. Seeing as I rarely shutdown/log off, it's not an issue.

As for the display, put it in the trunk whenever you park the car in the garage. Just remember to take it out whenever you go for a drive. You don't want to risk breaking the monitor should you happen upon a bumpy road.