Salts and additives can significantly affect the strength of water-mediated interactions in solution. We present results from molecular dynamics simulations focused on the thermodynamics of hydrophobic hydration, association, and the folding-unfolding of a hydrophobic polymer in water and in aqueous solutions of NaCl and of an osmolyte trimethylamine oxide (TMAO). It is known that addition of NaCl makes the hydration of hydrophobic solutes unfavorable and, correspondingly, strengthens their association at the pair as well as the many-body level (Ghosh, T.; Kalra, A.; Garde, S. J. Phys. Chem. B 2005, 109, 642), whereas the osmolyte TMAO has an almost negligible effect on the hydrophobic hydration and association (Athawale, M. V.; Dordick, J. S.; Garde, S. Biophys. J. 2005, 89, 858). Whether these effects are enthalpic or entropic in origin is not fully known. Here we perform temperature-dependent simulations to resolve the free energy into entropy and enthalpy contributions. We find that in TMAO solutions, there is an almost precise entropy-enthalpy compensation leading to the negligible effect of TMAO on hydrophobic phenomena. In contrast, in NaCl solutions, changes in enthalpy dominate, making the salt-induced strengthening of hydrophobic interactions enthalpic in origin. The resolution of total enthalpy into solute-solvent and solvent-solvent terms further shows that enthalpy changes originate primarily from solvent-solvent energy terms. Our results are consistent with experimental data on the hydration of small hydrophobic solutes by Ben-Naim and Yaacobi (Ben-Naim, A.; Yaacobi, M. J. Phys. Chem. 1974, 78, 170). In combination with recent work by Zangi, Hagen, and Berne (Zangi, R.; Hagen, M.; Berne, B. J. J. Am. Chem. Soc. 2007, 129, 4678) and the experimental data on surface tensions of salt solutions by Matubayasi et al. (Matubayasi, N.; Matsuo, H.; Yamamoto, K.; Yamaguchi, S.; Matuzawa, A. J. Colloid Interface Sci. 1999, 209, 398), our results highlight interesting length scale dependences of salt effects on hydrophobic phenomena. Although NaCl strengthens hydrophobic interactions at both small and large length scales, that effect is enthalpy-dominated at small length scales and entropy-dominated for large solutes and interfaces. Our results have implications for understanding of additive effects on water-mediated interactions, as well as on biocompatibility of osmolyte molecules in aqueous solutions.