okay i put the 12 word phrase and then put in a new password. So just to confirm this is the password that is used to send bitcoins right? Because in my laptop, i had to put a password to put in my password before sending the bitcoin.
So you are telling me i were to forget the password, that isn't an issue since i have the 12 word phrase is that correct? And thus when i reinstall electrum, well it won't ask for that password of mine and thus i have the option to put password or not? Thus having the 12 word phrase is enough for everything?
Electrum stores the wallet in your user directory. When you uninstall electrum the wallet is not removed. If you reinstall it it will detect that an old wallet is still there and open it up by default. To get it to create and/or restore another wallet you have to use the file -> new/restore option and later the file >open option to open a specific wallet file.
The 12 word phrase lets electrum recreate all your private keys and corresponding addresses. The wallet file stores transaction and address labels that cannot be recovered with just the 12 word seed. So you can access your bitcoins but the labels will not be there unless you keep a copy of the wallet file too.
The password encrypts the 12 word phrase before it is written to your hard disk. The idea is that if someone malicious gets their hands on your computer, either locally or remotely, they can't spend your bitcoin until and unless they enter the password.
I think that would be very bad idea because anyone that has access to your computer could send the bitcoin easily right if they search your computer? I haven't sent any password yet but i am happy that i was able to restore it on another computer.
Exactly. Setting a password is good.
The thing is i will not use this computer anymore soon. Its basically a computer im using to access my electrum because my laptop went down on me and i have to buy a new laptop. So how would you suggest i go with this? Just do the same thing right now on the new laptop when i get one... then erase electrum on this desktop? Thus add/remove programs and delete the program?
After uninstalling electrum from add/remove you should remove the wallet file too. You will find this in the data dir:
http://docs.electrum.org/en/latest/faq.html#where-is-my-wallet-file-located