On: Yes, I was hacked. Hard.

[nonane]

> but still I'll panic pretty badly if my laptop is ever stolen, because in there, somewhere, is probably a plain text password stored in a file

You really should consider using using whole disk encryption like FileVault or PGP-WDE. Encrypting a single directory or a home directory is not a good solution.

[barking → nonane]

You should encrypt all PCs, laptops that contain anything valuable with with something like truecrypt.

[yulerhow → barking]

I use TrueCrypt. I put all the files I create into a single encrypted volume. I copy that encrypted file to a thumb drive and bury it in the backyard. I don't encrypt the entire hard drive, though, something I should probably do to protect the recycle bin and whatnot.

[pella → yulerhow]

if you lost truecrypt password -> http://16s.us/TCHead/faq/

[tedunangst → pella]

^ if you used a poor truecrypt password

[ricardobeat → nonane]

and remember to use a different password from your iCloud account.