Microsoft hopes to simplify the task of managing multiple passwords with the next major release of its popular operating system. According to a post on the company's Building Windows 8 blog, a new feature will allow users to put an unlimited number of individual passwords behind one master password, and have them synchronize across all other Windows 8 machines they use.
Since the Live ID is the only password you'll need to know, you can set complex and unique passwords for multiple websites -- so if one site gets hacked and your credentials are stolen from their servers, you entire digital lives won't be at risk. Windows 8 will automatically enter your login information when visiting a saved website. This is similar to what services like 1Password and LastPass currently offer.
If your Windows Live ID password is somehow lost or stolen, there will be a number of safety features in Windows 8 designed to detect compromise and limit account usage until you can successfully recover access to it. For instance, users can request a confirmation code be sent to a mobile phone number or email address registered with Windows Live. Also, even if your credentials are compromised, you will still have full access to your PC since Windows 8 will accept the last password successfully used to log onto the system.
Microsoft says it will also offer a a number of "convenience" sign-in methods such as Picture Password and biometrics -- they didn't go into details but promised to do so in a future update. You can read more about Windows 8's security features in the characteristically long post at Building Windows 8.