First, I'll answer your last questions:
Installing BT5 with persistence means that many things will be logged by the system. For example: bash history, Internet history, kernel logs, some program logs, any added or modified files, etc. Depending on what you use BT for, it's possible you don't want an unauthorized person viewing this info in case of loss or theft of the USB drive. Even if you do nothing illegal, sometimes law enforcement simply views possession of "hacking" tools as criminal. Using encryption with a strong passphrase offers reasonable protection against such intrusion. It's really up to you to determine acceptable risk in this regard. I chose to set up encryption mostly as an exercise in doing it, and encrypting everything these days seems the most prudent approach to everything, IMHO.My question is: What exactly will encryption do for me and is it worth it?
I don't know of any GUI tool that installs BT5 on USB with encryption. I mean absolutely no disrespect when I say this, and I encourage you to pursue all avenues, but chances are, if you're not comfortable setting up encryption the "hard way," you probably don't need it.Also is there a way to install backtrack with the simple GUI tool and then encrypt it?
The flash drive is to install the encrypted persistent BT5 on, the destination medium. This flash drive (the 16GB minimum one) will behave just like a traditional HDD when BT5 is installed. The source medium to install from must be either a burned DVD, or the equivalent of a burned DVD on flash drive. BT5 flash drives installed with BT5 using unetbootin will behave very similar to the live DVD version: no persistence, no encryption, etc. If it's confusing for you, just ignore the part about unetbootin and simply burn a DVD and install from that source. The second flash drive is entirely optional, for people who hate burning DVDswhat i dont understand is why i need a flash drive AND a backtrack CD (or usb with backtrack already on it. Also i dont understand why he is using unetbootin if he continues to partition the drive.
It's worth clarifying that following the Infosec Ramblings guide installs BT5 on your USB key in the exact same way it would on a normal hard drive. It's really not a "live" USB stick in the normal sense; you won't get boot options for text mode or network stealth mode. You won't be able to use the final product as installation source for anything else, either. It's a "full, complete BT5 install on USB stick, with encryption." Using unetbootin, however, just makes a live CD into a "live USB stick, optionally with unencrypted persistence." In practice, the two are very similar, but in reality they're two different things. Hope there's no confusion