Hard drive encryption is a technology that provides security to your files. This technology protects the data which is stored on the hard drive by encrypting it and then storing it on the storage media. When a file needs to me manipulated or changed, the file is decrypted and then it becomes readable to the programs and user. This technology mostly is built right into the operating systems, if not, third party software can be installed.
The process of encryption is totally transparent from the users and application, no difference is noticed what so ever.
This technology provides security by avoiding unauthorized user or program from gaining access to the data. It is basically like a new layer of security which is implemented using this technology, to avoid hackers/unauthorized users from gaining access to your data.
The only drawback of this system is that it might slow down the work a little bit since it has to encrypt and decrypt the data, whenever a basic operation is performed on that data.