Laws of thermodynamics simplified:
1st law: there is no such thing as a free lunch
2nd law: you never break even
And most importantly, you can't quit the game.

As for entropy used in the context of data enryption and compression, maximal entropy is reached whenever the data is at a state where there are no more discernable patterns -- i.e. "thoroughly all mixed up"

In the physical world, everything tends toward an equilibrium. Energy tends to flow from a high potential state to a low potential state -- i.e. there's a tendency to "balance out". Whenever there is a flow of energy, one can tap into it to perform work. Some of that potential is being used to perform the work, while there's always that small amount that goes toward overcoming friction and such. Energy lost to friction would generally be too small to be usable (i.e. too little to be used to overcome the net loss we're always going to incur anyway).