If you convert it to a Roth you will have to put the amount you convert on your tax return as income for the year you do the conversion (since it was never taxed) and then be able to pay the tax on it either by reducing your refund or increasing what you owe. If you use money from the account being converted to pay this tax that's considered a distribution from that account and therefore subject to not only regular income tax but the early withdrawal penalty. Once it's converted though it grows tax free from that point on.
Basically would you rather pay tax on the balance in the account now at your current rates (if you're able to do so) or pay tax on the withdrawals as you take them out (presumably a much larger sum by then) at whatever rate you're paying at that time, usually a lower one for most people. Who knows what tax rates will be then though.
Oh, and I'm no accountant or anything. I've just done one of these conversions and I believe this is all true. Some things might have changed though but Schwab will know.
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