Do I want to engage the firevault?

I know what the firewall does and have engaged it.  The firevault looks frightening, however.  I am not sure I want to encrypt the hundreds of previous files I have on this computer.
What does it do?  Do I really need it?
Thanks

not unless you have sensitive information on your mac there wouldn't really be a need for it.
the following article gives information about filevault so you can make an informed decision about it:
http://support.apple.com/kb/HT4790
and also
http://support.apple.com/kb/PH10578
if you enable it and ever forget the password and you opt to not send the recovery key to apple then the only way to unlock the HD is take to apple store or service provider and have them flash the firmware and logicboard to unlock it which means any data on it will be lost.

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