After discovering how easy it is to recover data from a hard drive removed from one PC and attached to another, Melker asked the Hard Drives, NAS Drives, Storage forum if password protecting Windows actually protects your data.
Your Windows logon password--the one you type every time you boot--does not protect your files in any meaningful way. (There's an exception, which I'll discuss below.)

The logon password isn't intended to protect your files. It's intended to keep others from logging onto your computer as you. Why is that important? Because you do things on your computer that only you should be allowed to do, such as read and write your email. Unless you've set up your mail client to require a password every time you boot, anyone who can log onto your computer as you has full access to your mail.
And remember that only someone logged on with an administrator-level account can install software or make other important changes. You need a way to control that.
If you want to protect your files, you should encrypt them. And that brings up the exception I promised to tell you about: the Windows' Encrypted File System (EFS).
EFS encrypts files automatically, in the background. When you're logged in as yourself, the files appear normally. Otherwise, they're indecipherable.
Not all editions of Windows come with EFS. For instance, in Windows 7, only the Professional and Ultimate editions have this feature. And that makes sense. Careless use of EFS can render your files permanently inaccessible to anyone--including yourself. EFS works best when there's a IS department that knows what it's doing, and users who don't even have to know that their files need to be encrypted.
That's why I prefer TrueCrypt, a free, open-source program. You can encrypt an entire drive with TrueCrypt, but to my mind, that's overkill. I recommend creating a TrueCrypt volume, and moving your sensitive files to that. (When you think about it, there probably aren't that many files you need to secure.) Most of the time, this volume appears to Windows and users as a big file of gobbledygook. When you open the volume with your password, Windows sees it as a separate drive just like any other. You can read the files, edit them, create new ones, and so on.

One big advantage of this approach: Your sensitive files are only accessible after you consciously decide to make them so.