This is just a theorectical question, not something that I actually need to do because I have forgotten my p/w. 
I am curious as to how the various encryption software solutions work. (For example, using disk utility to make a passworded disk image). They work fine to a certain level, but if someone were to physcically remove the hard drive and examine it, wouldn't they be able to read even encrypted data somehow? I mean it is still there on the platter isn't it? Or does the encryption process actually change the file itself, rather than just block access to it?
I am curious as to how the various encryption software solutions work. (For example, using disk utility to make a passworded disk image). They work fine to a certain level, but if someone were to physcically remove the hard drive and examine it, wouldn't they be able to read even encrypted data somehow? I mean it is still there on the platter isn't it? Or does the encryption process actually change the file itself, rather than just block access to it?