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TL;DR: Install on both client and server, for ssh with better usability over mobile networks (3G/4G or spotty WiFi).

Also, you don't need root privileges to install it on the server side. You can just install it into your home directory, and run the client with --server=/home/you/bin/mosh-server. (It uses SSH for connection setup, and then communicates over UDP on a high-numbered port, so it doesn't need any privileged code.)

Anyone know if the UDP packets are encrypted?

Yes. They use AES-OCB. I've gone through the crypto myself, and while I am not an expert, it seems properly done.

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