There are two main types of data that must be protected: data at rest and data in motion. These different types of data are protected in similar ways using similar technology but the implementations can be completely different. No single protective implementation can prevent all possible methods of compromise as the same information may be at rest and in motion at different points in time.
Data at rest is data that is stored on a hard drive, tape, CD, DVD, disk, or other media. This information's biggest threat comes from being physically stolen. Laptops in airports, CDs going through the mail, and backup tapes that get left in the wrong places are all examples of events where data can be compromised through theft. If the data was encrypted on the media then you wouldn't have to worry as much about the data being compromised.
