I got to chatting today with someone who said she's a former hacker. I told her about when my Hotmail and Yahoo accounts were hijacked. She told me that anyone running an unfirewalled computer is vulnerable to this because those passwords are stored unencrypted in the Windows Registry.

I did a search of the Windows Registry for my current Hotmail password, but couldn't find it. Does the Windows Registry store our passwords in an encrypted form? And how safe are my passwords? I would've thought XP would be a bit safer than 98.