Well, I am by no means an insurance expert, but I can tell you what I know and then you can re-post in the Insurance section of this forum if my answer does not answer your question adequately.
A title, first of all, is legal evidence of ownership rights in a particular piece of property. A
good title is one that is legally valid.
Usually a buyer must obtain a
title insurance policy to protect a lender, and a buyer can also purchase an
owner's title insurance policy for his own protection. These are designed to insure that any "defects" in the title (for instance, a conflicting claim to the property in question or current litigation on the property) will be cleared by the title insurance company. If it is not cleared, the title insurance company will have to pay either the buyer or lender for any costs that arise if undisclosed problems are later discovered.
A lender's policy only protects the lender and his interest in the property, while an owner's policy will cover the owner during the entire time the owner owns the property.
Title insurance generally makes sense. I am not aware of any risks involved, except to the title insurance company.