Entering passwords on a mobile phone is a pain since I'm never sure if I entered the correct letter. Now it seems that the standard password field is more of a pain than I thought. Jakob Nielsen tells everything in his alertbox: http://www.useit.com/alertbox/passwords.html
Usability suffers when users type in passwords and the only feedback they get is a row of bullets. Typically, masking passwords doesn't even increase security, but it does cost you business due to login failures.
Since it's important that users can always log into the site and that the process should be as user-friendly as possible I created a small Drupal module that adds a checkbox to the login forms. Clicking this checkbox toggles the password field to a standard text field and back.
I'm interested in using this on a site soon to see the effect on users' behavior.