Passwords: to show them or hide them?

In reference to http://www.schneier.com/blog/archives/2009/06/the_problem_wit_2.html:

People have gotten worked up this week on whether programs should show passwords as they're being typed or not. The following is idle speculation, as to what's going on now...

Typing passwords is so 1970s. Researchers at Microsoft are toiling away as we speak, rescuing the shards of the failed SongSmith project. Given that most machines of the last decade are capable of decent voice recognition, we know they still aren't perfect. But the SongSmith group noticed that when people sing to the computer, they leave an easily identifiable, unique fingerprint, even allowing for variances, including colds. The main purpose of the SongSmith video was to get us used to the idea that it's no more unusual to sing a few bars in a public place as it is to type or talk on a cell phone.

So all together now: 0-2-1-3-4