Do you think that 256 bit encryption is overkill?

Depending on if you're using Unicode or ASCII ( probably Unicode ) your 16 character password is two bytes each, which is 16*2*8 = 256. This means that you have a password of 256 bits in length, or 128 bits in ASCII ( which is likely the character set you're confined to )

In short: No. It is not overkill for encryption.

Encrypting your files against viruses, though, does not protect them. Virii are meant to profit the person that wrote them. This means that if the malicious user wrote it to profit off of getting access to your files, it has a keylogger and will record your keystrokes.

When a person is in your house, alone, there is nothing to keep them from stealing whatever they want. The only way to keep them from stealing stuff is to keep them out. Luckily viruses are like vampires and you have to invite them in.

Learn safe surfing habits, don't visit questionable sites, don't pirate music or movies or games, and switch your account to a 'limited user' account after setting windows update to automatically update.

You might also visit a forum such as www.pcper.com and ask about getting a good antivirus program. You might consider Microsoft Security Essentials if you don't already have another one running: http://www.microsoft.com/Security_Essentials/

To further use metaphor: Encryption is like barring your windows and putting up an electrified fence. Once an intruder is in, it doesn't matter, and viruses have to be invited.

128-bit encryption is perfectly fine, but there's really no harm in 256-bit "overkill". The time to encrypt and decrypt is pretty much the same. In fact, in some cases, the encryption schemes with larger block sizes actually encrypt and decrypt faster. (And encryption schemes with larger key sizes frequently have larger block sizes as well.)