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Newbie's questions

I have very little computer knowledge and am very happy to have found Tor. According to the pictures on the Tor homepage, my communications are green (encrypted) until they reach the destination, there they become red (unencrypted). Here are my questions.

(1) Does it mean that even when I visit unencrypted sites, nobody would be able to tell what sites or pages I am requesting?

(2) Can the green line be cracked by intercepting the packets or headers?

(3) I don't know where the encryption key is stored. Can it be stolen if my pc is hacked?

Thanks for your replies.

P.S. Please let me know where to post if this is not the correct list.
P.P.S. Sorry about the Yahoo tail, POP seems to have stopped working.

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