It looks like Empathy uses the Gnome keyring for storing passwords, so
at least they are encrypted when saved (unlike Pidgin). I agree that it
would be good to not require password saving. But at least the passwords
should not be readable by anyone else even with admin or physical access
to the computer they are saved on, unless that person has your login
password to the machine (or whatever other password you're using for
Gnome keyring).

-- 
Passwords should not be required when creating accounts
https://bugs.launchpad.net/bugs/118800
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