Both. Most currently-existing encryption algorithms rely on the inability of current computers to factor large numbers. If you had a sufficiently large and powerful quantum computer, you could easily implement Shor's Algorithm, which allows quantum computers to factor numbers far more efficiently than electronic computers. The problem is getting a quantum computer capable of factoring numbers that large. The current record so far is something along the lines of solving 15=5*3 with 90% confidence in a few days. Until quantum computers can get a lot better than that, forget about them factoring an encryption key.
The other side of it is that you could in theory use a quantum computer to set up unbreakable encryption by using entanglement. The challenge, though, is getting the entanglement to work over long enough distances that you could actually transmit the key from the sender to the receiver, and that's not particularly close to happening, either.
edit -- reading a bit more about it now, and they've since advanced the state of the art by factoring 21.