Password encryption mechanism for ODBC client application users.

Hi All,
Can someone help me to understand more about password encryption with respect to ODBC client applications. As far as I know, password will be encrypted and stored in the database table by default. But, I've seen an option 'gtwcontrol' which needs to be set as 'YES' at gtw cotrol utility to enable password encryption. As the password encrypted and stored in TD tables by default for ODBC client application users what is the advantage of this gtwcontrol option? please clarify.
 
Thanks & Regards,
Srini.