I have got my Xperia M and somehow now it says "Type password to decrypt storage." I have tried all ways but nothing has helped. Will rooting the phone help my cause? Will it remove the encryption?
There is a lot of information about this out there, so I suggest you try searching first and then come back if you are still stuck. This search should get you started.
Unfortunately, I think you're going to have to factory reset the device, which means you will lose your data and installed apps. I really don't think rooting is going to help you since that will not give you the needed decryption key in itself.
Hopefully you have a backup. Good luck.