So, since Android 3, devices can perform boot-time, on-the-fly encryption/decryption of the application storage area (NOT the SDcard/removable storage) - essentially full-disk encryption. This requires a password/passphrase/PIN to be set as the screen unlock code and decryption key, unlock patterns cannot be used.
I have a suspicion that there is actually no benefit to enabling encryption, mainly because the memory chips that serve as the "hard drive" can't be easily removed like real hard drives in computers. I'm wondering if others can comment on my reasoning.
Scenario 1: Device is lost, or stolen by an opportunistic thief (i.e. unsophisticated)
With encryption -> Finder/thief can't gain access
With no encryption but with screen lock -> Finder/thief can't gain access
Scenario 2: Device is stolen by a sophisticated attacker, but they must leave no trace of the attack (therefore chip-off methods are excluded and the phone must be returned before the loss is discovered)
With encryption -> Finder/thief can't gain access
With no encryption but with screen lock -> Finder/thief can't gain access
Scenario 3: Device is stolen by a determined attacker, and the owner made to reveal the passcode under duress. Android doesn't have Truecrypts plausible deniability features.
With encryption -> Attacker gains access
With no encryption but with screen lock -> Attacker gains access
Are there any scenarios I've missed? So my conclusion is that there is no point to enabling full device encryption on Android - a screen lock will do. Discuss! (I am quite happy to be proven wrong, I just can't see how there is a benefit to it)