if i'm understanding you correctly, you're wrong. it's just another layer in the system (one more function in the mapping from your data to magnetic patterns - a function that's completely reasonable, predictable, etc, just hard to guess). the problem is that you need to enter the password on boot, which makes automated startup difficult.

for example, my laptop disk's main partition is encrypted. i need to enter the password when i boot, but nothing terrible happens if i lose power or the system crashes or whatever.

Obviously you should back it up, like you would be doing anyway.