The SMS encryption will be system wide, and you won't have to do anything at all to get it working. It has been developed to integrate with TextSecure, an open-source cross-platform client that encrypts SMS messages on your device, and it will also encrypt messages that are sent as long as the recipient is also using a TextSecure app. The impressive bit for CyanogenMod users is that the encryption is built-in as middleware, so it will encrypt messages no matter what SMS application you use.
The encryption has been built-in to CyanogenMod 10.2 nightlies, and is rolling out. Once everything checks out, it will also be added to CM 11, and be a default part of the system from here on out.