People who value privacy above everything else chafe at this. But people who value the security of their organization realize that this is a necessity. Aventail is a leader in this market. All the major firewall vendors and router vendors are in it as well. On the client side, Timestep and V-ONE are big.
Encryption takes more horsepower than sending data in the clear.
Firewalls and other server systems should employ hardware crypto engines. With these there are no performance issues. I expect that this functionality for mobile PCs will migrate to PC cards with crypto engines. Within the next 18 months. Whether this is done by saving an individual's private key information, encrypting it with a trusted third party's key, or saving all keys used to encrypt all documents, it is well understood that some mechanism is needed for the recovery of encrypted files owned by an individual, by the individual, or a company, by the company for business or law enforcement reasons.