PowerLine XE104 adapters - encryption / throughput question

Just got 2 of these. Ran utility to add a password. It all works but I have a few questions.

I am a newbie in that it asks you to enter one of the passwords that are on the adapter itself. I did that. It propagates this encryption password to the other adapters to which I have another router acting as an access point.

It also asks you to enter a password of your own choosing into the adapter which I did.

Any idea why the 2 passwords? When are 2 used?

Also would I get faster throughput if I had no encryption? The adapters are in my house and I have no worry that someone is going to walk up to my house with an XE104 and tap into it form an outside electrical outlet.
Is it me (probably) or do I sense an Internet slowdown (via direct connect Ethernet from router to PC-I have upstairs) when adapter is plugged into the wall and router. I currently have the other adapter unplugged (hence only 1 adapter-doing nothing) until I get a laptop later this weekend (will use downstairs with AP-also not plugged in currently) ie: is it me or could the Powerline slow down my router???

Thanks in advance Patty