This is an important topic. Sometimes we hear on the news about companies losing laptops or other storage devices with customers' personal details. If they use some kind of encryption, with a very strong password or other authentication, the data on the lost device would be useless to whoever finds it.
Yes, and if tools like iRecover would be able to read that data, disk encryption would be useless. However with the appropriate credentials the owner may still be able to perform data recovery. As long as he's able to somehow, on the fly or not, present un-encrypted data to a data recovery tool, data may be recoverable. In such an event I suggest you contact the manufacturer of the disk encryption software.
File system corruption does not have to be a problem, well, not a bigger problem than normal file system corruption.