I keep seeing all these posts that someone can hack my wallet. First I did not think that this could be done? If it can be done, how can I prevent it from happening? Does my wallet need to be online in order for them to be able to hack it or can they still hack a paper wallet?
Your wallet on your pc or in an exchange is only as safe as your pc or that exchange. Your pc could easily be compromised by any keylogger or trojan. And as far as exchange wallets go, well, Mt. Gox is really all that needs to be said about that. Paper wallets are safest, however not perfect because they need to be generated usually by your PC.