Nic Wolff has come up with an ingenious solution to having different password for every site you log in to. To get the full effect, check out Jon Udell’s screencast on the subject, which does a great job of summing things up.
Essentially, Nic asks you to come up with master password, and enter the domain name of the site you want a password for. He then concatenates the two strings, and runs an MD5 sum on the result. The first 8 characters of that are your password.
Each password is unique to the site, due to the domain name, and each password is unique to the user, due to your master password. There’s no password database to worry about, and you can use Nic’s site to access your accounts from anywhere, since his conversion utility is online (and it never submits anything back to the server). Pretty clever.
I look forward to the Firefox plugin for this, and I bet someone’s already cracked an editor open to write it.