The movies make it seem like everyone in the Middle Ages (I realize this is a very wide timeframe) always walked around with a sword in case they needed to fight. Is there any degree of accuracy to this? Wouldn't it be more practical to carry around some type of dagger?
In Medieval Europe, swords were as much a badge of office as a weapon. Knights and noblemen carried a sword not only for protection (banditry was a very real danger for travelers, then) but also as a public expression of their rank. This tradition went on well into the 18th century, when European noblemen would carry a smallsword of some kind during their daily life.
In feudal Japan, a similar tradition existed and samurai were the only social group allowed to wear two swords.
Swords were generally restricted to professional soldiers, and those men did indeed carry them regularly and would also carry daggers in case disarmed of the sword or caught in a close pinch where the sword was unwieldy. Any given person of the general populace would also likely have a knife of varying craftsmanship on them at all times for work or self-defense.