Note that Bitcoin addresses and transactions are inherently public, and the only thing that's private (and the only thing which needs protecting with encryption) are the private keys used to sign transactions. Anyone who knows your addresses can see how many bitcoins you have, where they came from, and where they're going. Privacy is only achieved by the difficulty of associating Bitcoin addresses with real-life identities. You can encrypt your entire wallet using Truecrypt or EncFS if you really want to, but be aware that this might not provide as much protection as you think.
Just because some punk found a wallet.dat on my machine doesn't mean he needs to know what my private keys are, and thus how much the wallet is worth. He won't be able to touch them, but he was able to breach my privacy by snooping on my personal finance. If I had considerable funds, that may motivate him to install a keylogger on my machine or something.
I was planning on using just the standard wallet encryption before backing up my wallet.dat to "the cloud", but having learned this, I'll wrap it in an additional layer. Thanks for the clarification, guys (and your great work, Gavin).
