I use passwordmaker.org which doesn't require keeping anything in a database. It uses a master password combined with a URL to generate a one-way hash which you use as a password. There are browser extensions to make it easy to fill in passwords when logging in (they pre-fill the URL in for you). You can customize the password hash algorithm, character set to use, length of password, and also any prefix or suffix that is to be applied. Since many sites need a capital letter, a number, and a special character I have them static as a suffix to apply to the hash. With these settings it'll generate a password that meets 95% of the sites password requirements.

http://passwordmaker.org/ is also free.

Honestly, the harder part is now remembering the username for each site (usually email or a few variations of usernames). I keep a database of my usernames for each site in the cloud.

This should make for a good topic from the professor on the Tom Leykis show Monday!!!

https://twitter.com/#!/tomleykis/status/204110248502493184