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ReadyBoost is a technology to assist getting Windows Vista or 7 to load faster on memory-constrained PC's.

Since a USB stick can be easily removed, what security options are available for this solution that won't negate the performance benefit?

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Readyboost by default uses Advanced Encryption Standard 128 (AES-128) encryption, which should be sufficient. I doubt very highly that your grandmother's cookie recipe needs DoD grade encryption. If the system is in contact with highly confidential information, perhaps you should invest in more RAM and find a full-disk encryption solution (also enable encryption on dump/log & hibernation files).

I haven't tried this, but you could attempt encrypting the USB with TrueCrypt. In order for ReadyBoost to work, it will need to be mounted in TrueCrypt (since Windows can't work with data that is encrypted by the user). All subsequent data that is written to the drive will be encrypted (both by ReadyBoost and TrueCrypt). This of course presents a new threat, if someone took your computer (or transfered data) while the drive was mounted in Windows and TrueCrypt it would be in plain text.

Since ReadyBoost is only used for cache purposes, read/write overhead due to encryption/decryption won't be noticed. Typically, if data is eligible for cache-storage, it's no longer in use anyway. You should also make sure that the cache on the drive is cleared at shutdown, since you'll no longer need it (I don't think Windows will clear drive's contents, even if it is for cache purposes, I could be wrong!).

Additionally, you should consider clearing your virtual paging file on shutdown as well, it will add a significant overhead to your shutdown time though. So if you need quick graceful shutdown to clear your session keys from memory (FBI knocking?), this may not be a good idea.

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