How do we solve this problem? You could spend hours trying to memorize dozens of unique passwords or you could let technology do all the work. 1Password is an outstanding utility that not only solves the issue of having to remember unique passwords for different sites but it also takes things a step further and enables you to store other types of (encrypted) information.
How does it work? You setup a master password w/ 1Password which "unlocks" the application and grants you access to the credentials/data that have stored in the application. The application can then sync your (encrypted) database via Dropbox to all of your desktop machines, mobile devices, etc. 1Password also integrates with your browser so when you visit a site that it has credentials stored for you can login to the site with just a couple of clicks.
How does this make things more secure? As I said you only need to remember one single password now so you can have 1Password generate a 20-40 character password for each site/service that you login to. This means all of your sites have unique passwords so that if one gets compromised it can't be used on another and the passwords are so long/complex that they are far less likely to be hacked in a brute force attempt. I spoke with a data security specialist whom I think highly of recently and he said that as far as passwords are concerned, length is far more important than complexity. The beautiful thing about 1Password is that you can have your cake and eat it to because their generated passwords are fairly complex (you can even tweak with how complex you want them) and you get to select the length, everything is in your control.
How do I get things setup? The one and only potential downside to 1Password is the cost of entry. The desktop application is $49.99 (single user license) and the universal iOS app (required for using 1Password on Apple mobile devices) is $14.99. You can try the desktop app (and browser plugins) free for 30 days to make sure that the system works for you but after only 5 days into my trial I realized I couldn't live without it and purchased the desktop and mobile versions of the app.
More than anything after reading this article I hope that people stop for a minute and think about how they are securing their online identity and how they might make improvements to that process. I happen to think that 1Password is the ideal solution for managing this type of secure data but there are many other alternatives out there including the open source KeePass, LastPass, RoboForm, and many others.