On Friday, the BBC published an interesting article "Keeping secrets from web spies". The article gives a reasonable overview of the use of passwords as well as the risks from things like keyboard loggers and other malware.
Passwords are the weakest form of security. While the article mentions things like keyfobs that contain one-time passwords, it doesn't mention that these too are subject to phishing attacks.
The article also doesn't mention how to remember complicated passwords. It is only through the use of memory tricks that complicated, longer passwords can be memorized and recalled in the user's brain.