It's supposed to be easier to remember because you remember the composite image, and not the words themselves. You can choose images that are easy to remember (something based on goatse perhaps) and construct a phrase from there -- at the same time you meet the suggestion of a password that is so foul you would never tell another person what it is, thus preventing that whole password sharing problem. Double win. Except you have to remember goatse every time you log in. http://questionablecontent.net/view.php?comic=1829

So with this technique, a password of "correct horse battery staple" would be detected, but "Tr0ub4dor" would not (http://xkcd.com/936/)...