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I'm still running Snow Leopard and recently enabled FileVault on my home directory. I noticed that the OS X thinks my home directory is 1TB, which is strange because the hard disk in my laptop is 500GB:

FileVault image size larger than physical volume

How could this happen? Should I be concerned?

While I enabled FileVault, I probably had an external 1TB drive connected via FireWire. I verified that I can still log in to my account without the external drive connected.

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According to this Apple Support discussion this is normal and is due to the mounted volume size being a "potential" size (usually twice) of the actual hard disk size. If it puts your mind at rest, I see exactly the same thing on my Snow Leopard 10.6.8 system with FileVault enabled and that's been just fine.

In addition, in my answer to FileVault sparsefile uses double of actual allocated disk space it could simply be that as Filevault mounts (and links to) the encrypted disk image, the size reported in Get Info is a result of the structure being traversed twice.

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