PwdHash is a browser extension (currently IE only, but Blake wrote it, and plans to port it to Firefox) which allows you to use a single password for all sites in a secure fashion, by making the actual password used a hash of your master password and the domain name.
I love the idea, but I think that, if and when it gets built into Firefox, a modified UI is necessary. (Blake does say that “our focus thus far has been primarily on the technology, not on Firefox-style intuitiveness”.)
Here’s my suggestion. The right-click menu of a password field would have an option “Fill in password”. Optionally, password fields would be decorated with a small “?” icon to click as well. Activating the function would prompt for the master password if it hadn’t been given in that session, and then fill in that password field using the standard algorithm.
This style of UI, where the user has to request the password to be filled in, would work in harmony with the existing password manager, which would do the automatic prefilling the passwords in the future. It allows for a gradual transition between the old model and using PwdHash. A user could run any copy of Firefox anywhere, and the PwdHash mechanism would Just Work for them, using the same UI actions. There would no longer be issues with PwdHash’s auto-fillin filling in the wrong fields, or trying to deal automatically with password reset forms.
For legacy browsers, the web-based generator should move to a well-known short URL (like “pwdhash.com”) and should auto-fill the domain box with the domain of the Referer, if present. There’s also an niche for a bookmarklet which takes the master password and fills in any password fields, if one can be squeezed inside the character limit.
Interestingly, as the site notes, PwdHash protects against phishing as a side effect. Pick “Fill in password” on a phishy site, and the password they get won’t be the one that the genuine site uses.