[LogicX]

... why not do exactly that; but ALSO have a guest account, and prey installed. (Also re: not instantly formatting; put firmware and/or hard drive passwords on to slow them down -- most thieves are not computer experts)

I think you under-estimate the speed and hassle of dealing with insurance.

Also most insurance has a deductible. You're still out typically hundreds of dollars.

I had a macbook pro of one of our employees stolen. We used prey to get it back, with assistance from the police. Yes we have corporate insurance, yes we backup our data; but we were still very pleased to receive our stolen property back.

[gst]

If you have a guest account you can't encrypt your whole harddisk. And if my laptop gets stolen I don't care about the money but about my data falling into the wrong hands.

[shabble]

Set up a honeypot account 'm[ou]m', with a visible password hint to the tune of 'Dammit m[ou]m, THE PASSWORD IS "Susan"'.

Make sure it has no access to the filesystem outside of its homedir, and you could even set some login items to watch for net access and push a notification.

[gst]

The honeypot account still needs access to the operating system, and thus to the harddisk password if you use full-disk encryption.

Full disk encryption is more or less default for most Linux distributions and OS X Lion. In addition, it's the only sane solution if you want to securely encrypt your data.