1) Encrypt the new Ubuntu installation for security (you will choose a security key in the next step).
What Does This Option Mean
By enabling this option you enable complete encryption of your Ubuntu partition on your hard drive. Every time you boot your computer into Ubuntu you'll need to provide a passphrase so that you can access your Ubuntu partition. Note that this is separate from the password you use to log into a user, which you would still need to provide after giving your passphrase.
When you don't encrypt, your data is shown in plain text which anyone can read; data is not stored with security in mind. In a situation where your computer is stolen, the thieves could easily read any data contained in your operating system. Your user password does not necessarily protect your data because the thieves could just use a Ubuntu LiveCD (for example) to bypass this to gain access.
In other words, your password is like the front door key to your house which contains nicely organized valuables (data). Unfortunately, there are alternatives to bypassing this security, like smashing a window, so in the end a thief won't have much trouble finding and stealing anything of value in your organized home.
The advantage of encrypting your Ubuntu partition is you can be confident that an "attacker" that has physical access to your drive will be highly unlikely to recover any data at all. Remember, this will include data which you may not consider important, such as your program files, since the entire Ubuntu partition gets encrypted.
To continue with the analogy, your house is now a complete dump; encrypted data appears scrambled and random. Even if the thief gains access to the house they will have a hard time finding/ getting anything of value.
The disadvantages (at least as many I can think of or have come across) are:
- There is some computational overhead, meaning your system will run slower. Although, this is usually insignificant with modern CPUs with AES-NI hardware.
- You have to remember a passphrase, as well as a login password to start using Ubuntu.
- If you use anti-theft software like Prey, the thief will have a hard time logging in. Hence, these anti-theft tools can become useless. However, this can be circumvented by giving the thief an alternative dummy OS partition to use that you wouldn't normally use yourself.
- Data recovery becomes more difficult since you can't just 'look' at your partition, you have to also decrypt it as well.
- Losing or forgetting your passphrase will mean you will lose access to important data; you will be considered no different to a thief. This really should never happen unless you suffer a severe head injury. Although, you can avoid this unexpected disaster by backing up important data elsewhere, which you should be doing regardless.
It should be said that there is a 'lighter' weight way of encrypting by just encrypting your Ubuntu '/home'; /home is usually where anything of value is stored for a typical user). When using this method, you only need the user password when booting and logging in. The passphrase which you choose is only ever used specifically by you when you need to recover data and you are unable to login anymore, for instance, because your Ubuntu somehow became corrupted.
2) Use LVM with the new Ubuntu installation (this will set up Logical Volume Management. It allows taking snapshots and easier partition resizing)
This page summaries LVM well. Essentially, if you plan on playing around with partitions often or require advanced and flexible partitioning then you may want to consider ticking this to make life easier. There aren't really any disadvantages for a typical user.