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Where Does Internet Explorer Store Passwords?
The saved user ID/Password pairs are stored in the Registry under a key whose default permission settings make it inaccessible to all users-even the user to whom the passwords belong. Only the system itself has direct permission to read and change Registry data under this key. Using RegEdit you could modify the permissions on that key and read its contents, but doing so still wouldn't reveal anything useful, as the data is thoroughly encrypted.
On the other hand, once you've logged on to your account in Windows, all of your saved passwords can be utilized by anybody who has physical access to the computer. The interloper can't learn what the password is, but can use it to log on automatically. If you allow Windows to save passwords for you, never leave your computer logged on when you're not sitting in front of it. Either choose Log Off from the Start menu or lock the computer—on many systems you can do this by pressing the Windows key plus L for Lock. As a backup, set the screen saver to kick in after just a few minutes of inactivity, and check the box for password protection.
So, there is a certain amount of risk in letting IE save passwords. Here's how to turn off that feature, if you so choose. Select Tools | Internet Options from IE's menu, click the Content tab, and click the AutoComplete button. Click the Clear Passwords button in the resulting dialog to clear out passwords that were previously saved. Then uncheck the box titled User names and passwords in forms, click OK, and click OK again.

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