Despite being a nerd and being into IT for a long time I've been somewhat lazy with my passwords. Not "password" lazy but not good enough IMO. I had a 3 tier system I used one low strength password for most of my logins and sites, a medium strength one for some other stuff, and one or two strong ones for my banking and the like. But I never bothered to change them. Recently I got a message that my Facebook and Hotmail accounts seemed to have been hacked to I decided, ok time to change passwords. I'm now going to be using KeePass Password Safe:
to save all my passwords and a lot of other stuff in a strong encrypted file. I've actually been using this for a while and it's really good, just haven't been using it enough. Then I'll use super strong passwords for most things and copy the passwords from the encrypted database when I need to use them. I recommend others do something similar if they are worried about security. Just make sure you choose a strong main password for the keeypass login, something you can remember of course. This uses 256bit AES encryption so it's all but hack proof, assuming you use a strong password.
Only thing now is that I won't be able to memorize these passwords. Try memorizing these suckers: