It's the new incarnation of FileVault that was introduced in OS X 10.7, and rather than merely encrypting your home folder it encrypts your entire OS X installation. (I'm still running 10.6.8, so I'm relating what I remember, and I think it's correct.)
At the time, I saw it as an obvious precursor to running OS X from the cloud, and if I remember correctly, one of tacit's points against was that stuff like Creative Suite were too big for that.
