encrypted user home directory

This is just a basic idea so far. It would be very cool to have a process to do the following:

1. Login a user via PAM
2. Request another passphrase for the decryption process
3. Mount the users homedirectory from the encrypted datafile

The problems with this procedure is, that many processes refer to the users home directory via the /etc/passwd file and the home directory should stay there all the time - with or without active encryption.