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Data Encryption Server and Workstation Best Practices

I have a client that is using Microsoft Server SBS2003 and XP Pro workstations.  This client is a financial client and they want to encrypt all the information  on their server.  Their big concern is if some one walks off with their server.  I think that Microsoft has some encryption built in but do not know the pros and cons.  

I am looking for advice on the best way to secure this operation.  It might even mean an upgrade in the OS and that would be ok.  Not sure of just where to start and could really use some experts advise.

Thanks.

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Commented:
Use EFS

it is built in to the OS and simple to use.

Works on Win2k8 as well, if you intend to upgrade.

http://technet.microsoft.com/en-us/library/cc700811.aspx
Alternatively, you can download truecrypt. It's free (though I strongly encourage a donation) and does more than just encrypting your files. Very neat application. Read about it and download it at http://www.truecrypt.org/downloads.
Commented:
Hello ibesupport,

Just wanted to mention that in the past when we used Truecrypt we found that it doesn't have any centralized key management features, I'm not sure if EFS does or if this is important for what you are thinking about implementing. You may want to check out PGP Whole Disk encryption and PGP netshare (for encrypting data making it only available to users with the correct encryption keys).

Hope this helps.