In terms of security, Simplenote works a lot like other popular online services such as Gmail and Facebook. Your personal information is protected by a strict Privacy Policy. But due to the need for searching your notes from the web, the contents must remain unencrypted while in storage so the software can find your search terms.
Unlike a lot of other services, however, by default your notes in Simplenote are always encrypted when they're in transit across a network. This is important. It's when your personal information is most vulnerable. We believe that all modern services should provide this level of protection by default.