Commands like CREATE USER foo PASSWORD 'bar' transmit the password in 
cleartext and possibly save the password in various client or server 
log files.  I have just fixed this for psql and createuser to encrypt 
the password on the client side.  A quick check of the pgadmin3 source 
code shows that you are also affected by this issue.  I ask you to 
check where you paste cleartext passwords into SQL commands and change 
those to encrypt the password before sending or storing it anywhere.  
The required function pg_md5_encrypt() is contained in libpq.

-- 
Peter Eisentraut
http://developer.postgresql.org/~petere/

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TIP 9: In versions below 8.0, the planner will ignore your desire to
       choose an index scan if your joining column's datatypes do not
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