Can I encrypt an external harddisk which is in HFS+? (journaled, encrypted) is a new option which I am able to find in Lion. 

Can I convert an existing harddrive (external) to encrypt the whole drive instead of using other tools ?
Whole disks, no, but partitions, yes. While the Disk Utility GUI application cannot, the diskutil command-line utility can do this.

First, come up with a password (such as myVerySecurePassword). I believe this is not tied to your login password, unlike encrypting the boot volume.

Then, find out the identifier for the target volume, e.g. disk1s1:

diskutil list


Then, use diskutil cs convert, like so:

diskutil cs convert disk1s1 -passphrase myVerySecurePassword