FileVault is a security tool found on all OS X-based computers since version 10.3. Basically, its job is to secure all of the data on your hard-drive through encryption. Once encrypted, unwelcome intruders are unable to access your data without a means of decrypting the drive. FileVault is among several security tools in OS X.
Mac OS X Security
Apple's OS X operating system offers several layers of security for your files. The first is user accounts and their associated passwords. Individual accounts on a Mac are exclusive unless the system administrator determines otherwise. However, many individuals working with sensitive information, or who simply desire a greater level of security for their files, can use FileVault. FileVault applies a sophisticated encryption algorithm to your entire drive, making them impossible to access and read by anyone lacking the decryption algorithm.
How FileVault Works
FileVault protection is optional and must be engaged by the Mac's administrator. FileVault's controls are accessed in OS X's System Settings, under the "Security" tab. The user first creates a master password that can unlock all accounts on the computer in the event of future problems. The user then clicks "Turn On FileVault" and FileVault proceeds to encrypt the entire home drive. From this point on, files accessed by the user are automatically decrypted for use and re-encrypted when no longer in use. FileVault can be turned off at any time in the System Preferences' "Security" tab.
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Extra Security Features in FileVault
When FileVault is engaged, the user has the option of storing their master password and an automatically-generated recovery key on Apple's dedicated servers. If this option is used, the administrator must fill out a series of security questions to answer in order to recover this information. Later, if the administrator forgets the master password or cannot access a subordinate account for some reason, they can contact Apple and answer the security questions to receive the recovery key.
FileVault provides a high level of encryption security for your files, but has certain limitations. For example, it requires a certain minimum amount of available space on your drive for the creation of the virtual disk image it uses to keep track of file locations. Further, FileVault tends to slow down file retrieval and saving. If your work involves highly CPU- and RAM-intensive processes, such as when working with digital audio and video, FileVault will likely slow down your workflow noticeably. The trade-off lies in the excellent data security FileVault provides.