Why can't I add my home folder to the Mac OS X Lion Finder Sidebar?

After upgrading to Lion, I'm unable to add my home folder to the favorites section of my Finder's sidebar. I tried it through Finder Preferences by ticking the checkbox, but it deactivates itself after I click it. I've also tried dragging the home folder into the sidebar, but that doesn't do anything either (no error message) :(

I had the same problem, turning off legacy FileVault, as Andrey suggested, solved the problem for me.

Legacy FileVault encrypts the user's home directory only, whereas FileVault in Lion encrypts the entire disk. I'm almost sure, adding the home folder to the sidebar will work with Lion's standard FileVault activated.

I had the same issue until I turned off FileVault on my home folder. And now I can add my home folder to the sidebar in Finder.