Encryption Is Important
For the security-conscious user, full-disk encryption is a necessity of digital life, especially when using mobile laptops that are commonly stolen.
Without encryption, a thief could readily circumvent the meager Windows password to gain access to sensitive files. Once encryption is enabled, however, a thief would need to provide an additional boot key before ever encountering the traditional Windows login. Failure to provide this key prevents access to any data, even if the hard drive is imaged or relocated to another operating system. This security does impose a small performance overhead, but with ever-quickening processors, the effect is negligible compared to the benefits.
That said, encryption has its limits. For one, it does nothing to prevent an Internet hacker from breaking into a running, Internet-connected computer and accessing on-the-fly decrypted files. If you smartly kept your Windows Firewall enabled, you need not worry excessively about this scenario.
Encryption also doesn’t protect your files after you’ve entered your boot key and have your system running, because access is already authorized (however, it does lock down again when entering hibernation or shutting down).
Finally, files copied to an unencrypted drive are potentially accessible on that drive, even if the originals are safely locked away on the encrypted drive. These limits, however, are easily countered with good habits: Keep your firewall and anti-virus software enabled, keep backups encrypted and don’t leave an open computer unattended, especially where others could access it.