Stop masking passwords Jun 23 2009
Jakob Nielsen says: stop masking passwords in web input forms.
Usability suffers when users type in passwords and the only feedback they get is a row of bullets. Typically, masking passwords doesn't even increase security, but it does cost you business due to login failures.
Sing it, brother. It's even worse on the iPhone...even with the last letter thing that it gives you, I still mistype passwords all the time.