My problem is this: What if you lose the key? Then it doesn't matter how fabulous your passwords are, because someone else now holds all of them, and you don't have a clue what they might be in order to change them. I find that worrisome.
Anyway, what you get here is called Aladdin. It's a USB key you can add to your keychain, and when you need to sign into something on your computer, you simply insert it into a USB port and you're off and running. It works by generating passwords for you. (If you're anything like me, you've probably spent entirely too much time sitting in front of a screen trying to think of something both secure and memorable.). Instead of any of the things we normally think of, however, Aladdin generates random long strings of letters and numbers, then assigns them to your various password-protected accounts. If that's not good enough for you, it also offers you the capability of adding, deleting or changing some of the characters, or using two Aladdins in tandem for even more security.
I still worry about misplacing it. But then the odds are in your favour that some random person who picks up your keys where you absent-mindedly left them sitting on the counter at the coffee shop while fumbling for change won't know what they've got. And even if they do, odds are good they do not also have access to your computer.
Aladdin is not yet available, but is currently seeking funding on IndieGoGo. You can get in on the ground floor for just $20.00 US.