Wonderful World Of Linux 2.4 - Final Candidate
CFS is a solution, but not the best solution. It runs in user space (if I remember correctly), so a skilled script kiddie could read the memory contents and discover the key. Furthermore, it is pretty slow, especially if you are considering using large files (i.e. MP3 files). A better solution was posed by some Columbia grad students, called Cryptfs. Cryptfs builds on CFS and the later implementation TCFS. For an overview on the weaknesses of other encrypted file systems check out the Cryptfs home page. Unfortunately, I cannot find the implementation of Cryptfs.
Another solution is to use a loop-back encrypted file system. There is a how-to at linuxdoc.org.