Is it true that if the seed is compromised, then everything is lost, even if I encrypted the wallet with a strong password?
If so, since the seed is not encrypted, it is much more easy to be compromised, then maybe it is better to not know the seed at all (at least I have backup of the encrypted wallet)?
Of course you could put the seed in a text file and encrypt that file, but backup the wallet file is even less complicated
The seed is basically your "master private key." Using this, an attacker can basically recreate your entire electrum wallet, sans imported private keys, labels etc...
If you don't want the seed to be unencrypted, don't save it anywhere. Electrum requires a password to create a wallet, so as soon as you put your password in, your seed is encrypted.
If your wallet file is ever cracked, they will have access to your seed and all of your private keys, but as long as they don't crack your wallet file's password and you don't paste the seed anywhere, no one is going to get your wallet.
If you're worried about the scenario: "What if I create an electrum wallet with a screen recorder/clipboard recorder/key logger malware on my pc and my seed gets stolen?" Then I guess you would be justified, but if you have a virus, I would send all bitcoins to a paper wallet, delete all wallets, wipe my computer of viruses, and if I were super paranoid reformat my entire OS.
I highly recommend Electrum's offline wallet functionality if you're worried about security. You can install it to an Ubuntu Live USB, and sign your transactions from the USB's OS, while keeping a watch-only wallet on your online computer for giving out addresses, keeping track of your bitcoins, etc.
If you would like more detailed instructions on creating a Live USB to install Electrum offline, let me know.
If you use it normally, it is just as secure as any other wallet software.
If you write the seed on paper and keep it somewhere safe... you will always have access to your bitcoins. （However, so will an attacker if he gets your paper... but that's the same as a paper wallet, too.)
