I would word that as "Only if you don't explicitly disable it". Not trying to be super-pedantic, but I think it's important to note that the default is unencrypted, since most people probably won't change that default, especially when the feature isn't mentioned on the FileVault doc page.

But yeah, flip that switch if you're running OSX.

EDIT: Acutally looks like that is the default on Snow Leopard. Disregard this comment.

kgo may have been referring to how the contents of /private/tmp, /private/var/log and /private/var/tmp are not encrypted and may contain private information, such as com.apple.QuickLook.thumbnailcache.

I've had some success using scripts on the following website to plug these holes, but recently, I have been more concerned with my data's survivability than my privacy. Once that grad degree is done, I hope to return to a more secure approach.

http://xercestech.com/fixing-filevault-random-key-disposable...