This is a Great Article!:) I have followed Computer and Internet Security for the last 13 Years and this info is worth reading every word... And then putting these principles into Practice, for Sure! I have put in the crux of the Article here, to get you interested...

Don

The Usability of Passwords: /by @baekdal .

Written by Thomas Baekdal | Saturday, August 11, 2007 | Section: tips

Security companies and IT people constantly tells us that we should use complex and difficult passwords. This is bad advice, because you can actually make usable, easy to remember and highly secure passwords. In fact, usable passwords are often far better than complex ones.

So let's dive into the world of passwords, and look at what makes a password secure in practical terms.

Update: Read the FAQ (updated January 2011)

Update - April 21, 2011: This article was "featured" on Security Now, here is my reply!

How to hack a password

The work involved in hacking passwords is very simple. There are 5 proven ways to do so:

Asking: Amazingly the most common way to gain access to someone's password is simply to ask for it (often in relation with something else). People often tell their passwords to colleagues, friends and family. Having a complex password policy isn't going to change this.
Guessing: This is the second most common method to access a person's account. It turns out that most people choose a password that is easy to remember, and the easiest ones are those that are related to you as a person. Passwords like: your last name, your wife's name, the name of your cat, the date of birth, your favorite flower etc. are all pretty common. This problem can only be solved by choosing a password with no relation to you as a person.
Brute force attack: Very simple to do. A hacker simply attempts to sign-in using different passwords one at the time. If you password is "sun", he will attempt to sign-in using "aaa, aab, aac, aad ... sul, sum, sun (MATCH)". The only thing that stops a brute force attack is higher complexity and longer passwords (which is why IT people want you to use just that).
Common word attacks: A simple form of brute-force attacks, where the hacker attempt to sign-in using a list of common words. Instead of trying different combination of letters, the hacker tries different words e.g. "sum, summer, summit, sump, sun (MATCH)".
Dictionary attacks: Same concept as common word attacks - the only difference is that the hacker now uses the full dictionary of words (there are about 500,000 words in the English language).

When is a password secure?

Skipping on down...

Does that mean that the IT-departments and security companies is right? Nope, it just means that a 6 character password isn't going to work. None can remember a password like "J4fS<2", which evidently mean that it will be written on a post-it note.

To make usable passwords we need to look at them differently. First of all what you need is to use words you can remember, something simple and something you can type fast.

Like these:

Using more than one simple word as your password increases you security substantially (from 3 minutes to 2 months). But, by simply using 3 words instead of two, you suddenly got an extremely secure password.

It takes:

1,163,859 years using a brute-force method
2,537 years using a common word attack
39,637,240 years using a dictionary attack

It is 10 times more secure to use "this is fun" as your password, than "J4fS<2".

If you want to be insanely secure; simply choose uncommon words as your password - like:

A usable and secure password is then not a complex one. It is one that you can remember - a simple password using 3+ words.

It is not just about passwords

One thing is to choose a secure and usable password. Another thing is to prevent the hacker from hacking password in the first place. This is a very simple thing to do.

All you need to do is to prevent automatic hacking scripts from working effectively. What you need to do is this:

Add a time-delay between sign-in attempts. Instead of allowing people to sign-in again and again and again. Add a 5 second delay between each attempt.
It is short enough to not be noticeable (it takes longer than 5 seconds to realize that you have tried a wrong password, and to type in a new one). And, it forces the hacker to only be able make sign-in requests 1 every 5 seconds (instead of 100 times per second).
Add a penalty period if a person has typed a wrong password more than - say - 10 times - of something like 1 hour. Again, this seriously disrupts the hacking script from working effectively.

A hacker can hack the password "alpine fun" in only 2 months if he is able to attack your server 100 times per second. But, with the penalty period and the 5 second delay, the same password can suddenly sustain an attack for 1,889 years.

Remember this the next time you are making web applications or discussing password policies. Passwords can be made both highly secure and user-friendly.

Read More...
http://www.baekdal.com/tips/password-security-usability

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