Just as a quick followup on yesterday's post, James has now posted a nice Q&A with the most frequently asked questions. The Gmail Help Center also has an excellent security checklist (https://mail.google.com/support/bin/static.py?hl=en&page=checklist.cs&tab=29495
And just to add one more point: account hijacking is not a theoretical possibility. Every day we thwart tens of thousands of hijacking attempts where the hijacker has the correct account password.
We've occasionally had attackers with hundreds of thousands of correct passwords (usually from users who use the same password and user name on other sites). Think about it--you could be one of them.
Is it cumbersome? No, I use it and I rarely notice. As James puts is: "It's a five-second chore each time you do it [when you use a machine other than your own]. .... It protects you from what my wife encountered: the loss of six years' worth of mail, documents, photos, life. Take your choice."