No encryption, it locks the hard drive so data cannot be accessed, this is done by a chip on the hard drive controller board, they are very hard to break into if you do not have the password, some makes/models are impossible even by data recovery/crack experts.
The stronger the password the harder it is to crack it.
If you put the locked drive into another PC it cannot be unlocked even if you have the password.
Some laptops provide a utility to lock a hard disk with a password. These passwords are not the same as BIOS passwords. Moving a locked hard disk to another machine will not unlock it, since the hard disk password is stored in the hard disk firmware and moves with the hard disk. Also, adding a new (unlocked) hard disk to a locked machine may cause the new hard disk to become locked. Also, note that hard disk lock passwords cannot be removed by reformatting the disk, fdisk or any other software procedure (since the disk will not allow and reads or writes to the disk, it cannot be reformatted.) Usually, the BIOS password and hard disk lock passwords are set the same by a user and we can recover the BIOS password directly from the laptop security chip (after it is removed from the system board.) However, it is possible that the BIOS password and hard disk lock passwords may be set different. In this case the BIOS password will not unlock the hard disk.