This is correct!
When using this program Eraser will only wipe those parts of the disk which are marked by Windows as free (ie for rewriting over). All files and folders will be left untouched.
I've been using the program for a couple of years now and have had no problem.
The only thing that comes with Eraser that will wipe everything on the hard drive is the DBAN (Darik's Boot and Nuke) progam, and that is a seperate program anyway (that does the same to the hard drive as Eraser does to the unused (free) space.
To put your mind at rest, when first running eraser run the 1 pass Psuedorandom method - it will take less time and you will be able to see that it works without any problem. After that you can increase the amount of passes or vary the mathod of erasing.
