Mentioned again here:
http://www.ubuntu-unleashed.com/2007/08/howto-local-password-encryption-for.html

I check my accounts and I can't belive it.. Plain text, anyone can read
this info, take control of, for example.. my Gmail account -> Launchpad
-> Google Reader -> University Account -> Microbloggins -> Private Works
-> etc..

Please fix this bug, here is one fix for that:
http://www.ubuntu-unleashed.com/2007/08/howto-local-password-encryption-for.html

-- 
Pidgin stores passwords in plain text
https://bugs.launchpad.net/bugs/226974
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