Encryption on /what/? Point to point or content encryption? Also if your password has been compromised and that same password is used to encrypt your data then what exactly would encryption do?

Data encryption with a private key that the user holds. Evernote, like Dropbox, etc. have your crypto keys, and thus will always be subject to hacking and such. If I, and only I, had the keys it would be up to me to keep them safe, and my data would not succumb to a hack of their database, etc.

But password resets would quite literally be impossible.

Encryption on the notes. Who would ever promote using the evernote login to encrypt?!

Passwords are typically not used for encryption, since you don't want to re-encrypt data when user changes the password.

Yes they are, just in a more complicated way. You don't have to re-encrypt if the user changes their password. FDE would be pretty useless if so.

You can encrypt notes.

How do you encrypt a complete note? AFAIK the official Evernote client only allows encrypting text content within a note.

Yes, as far as I know that's all you can do. I wish you could do pictures as well:-\