MacOS – Mac OS-X disk file format

I'd say this is more work than it's worth since Lion clearly isn't expecting to be able to deal with the new encryption scheme. You'd be better off running Lion virtually as that's far less work to do than hacking together the parts of Mountain Lion needed for file vault 2.

The obvious catch-22 is where you need to expose that disk to Lion to get it encrypted in the first place, the recovery HD placed on that drive will allow the installer to prompt for a password and get the CoreStorage keys set up to unlock that volume for the installer.

As mentioned in the comments, it's easiest to connect your encrypted Mac to another Mac in target disk mode to get the Lion installer to run (or better to just image things) - but advanced knowledge of fdesetup and the boot process also might allow other solutions. You will likely have continual problems with automatic rebooting since Lion isn't going to know how to decrypt the boot volume nor will the Recovery Boot image want to hand off to Lion since it's not supposed to know how to handle Filevault 2 drives in the first place.

• http://derflounder.wordpress.com/2012/07/25/using-fdesetup-with-mountain-lions-filevault-2/

Taking aside the part that says which OS a particular filesystem is associated with, the main point is the word "journaled".

I include the following Wikipedia quote as there is no point re-inventing the wheel:

A journaling file system is a file system that keeps track of the changes that will be made in a journal (usually a circular log in a dedicated area of the file system) before committing them to the main file system. In the event of a system crash or power failure, such file systems are quicker to bring back online and less likely to become corrupted.

Taking that to one logical end, an external drive is by definition more likely to be removed from the system than an internal drive. It's not possible to remove your laptop drive and keep the OS running, but perfectly possible with something USB or Firewire attached for example. As such you run a greater risk of changes that need to be written to the drive failing to complete should you remove the drive too quickly, or without following the correct eject procedures.

Particularly if you use any form of caching, the data may be waiting to be written to the disk at the point of removal, thus losing your data.

A journaled filesystem helps to prevent too much damage in these scenarios by keeping a log of all changes it needs to apply, and noting when they are successfully completed. In this way it can examine the log on a restart and work out of there are outstanding changes that were never completed. This is far faster than simply running a chkdsk or similar command to check the entire filesystem for problems which you would need to perform on a FAT32 file system.

In addition to the protective side of things discussed above, is the fact that a HFS filesystem has all the Mac OS X hooks built in for automated indexing, backup, version control and so on that would not be possible on a FAT32 enabled filesystem.