They were storing passwords in a way that could be unencrypted?
I'm not positive, but awhile ago (couple of weeks) someone hacked into the PSN and found that no data or anything was encrypted. Possibly because of the fact the the PS3 was 'unhackable' so Sony didn't encrypt anything although something about the way information was sent, like, it couldn't be read. I don't know this is all vague memory I'm going off of here.
Don't they understand the concept of private property???
Well, you could turn that the other way, the PS3 was private property and GeoHot never signed any Terms of Service or other agreements.
"If I do not want others to quote me, I do not speak." -- Phil Wayne