Password reset using install disk.

I was about to wipe a disk tonight, so I booted from the OS X install DVD. I decided to try something in the interest of learning something new. I chose to reset the password on my admin account. Let's call the account "Joe". I was able to reset the password for Joe. without knowing the previous admin/user password.

When I rebooted, from he HD, I used the newly reset password to log in to the Joe account. I now had access to all of the files in the the user account folder. Is it really this easy to get to access to a user's home folder? What if FileVault had been enabled on the home folder before I reset the password, would I still have access to the files after resetting the password from the install disk?