This is more of an educational question and not so much an attempt to perform a specific task.
A) When encrypting a disk, does this generally mean that all data is encrypted, file metadata, data, everything, or does this happen in a smarter way?
B) Once you plug in a disk I can imagine that some autorun file fires up a program (found local to the disk probably) that requests a password which it will use for the decryption process upon demand. So when you are trying to access a file, the disk will decrypt it first with the password you provided earlier using the decryption software on the disk. How does the respective OS know when you've accessed a file on the disk and what program to use (in this case the one on the disk) to decrypt the file? In the same logic, how does it know when you wrote a file on the disk so it can encrypt it transparently?
C) Are there any encryption mechanisms that simply encrypt the filesystem tree hierarchy but not the data? I understand this might sound like a bad solution as the actual data of the files still reside on the disk and therefore it can still be accessed but it could maybe be a very fast way to encrypt drives with HUGE volumes of data and keep them safe from most of the non-tech savvy population? This would only be used for not so sensitive data of course.