A friend of mine recently asked if Meebo

, the AJAX Web based IM product (which allows you to chat on AIM, MSN, Yahoo! and Jabber of GoogleTalk in one interface), was finally encrypting their passwords.

At the time that I wrote about meebo, they had made two colossal blunders. One was not encrypting passwords and the other was not having a privacy policy defined. Well, they’ve fixed both.

The privacy policy has been defined and according to their main page they are encrypting passwords with 1024-bit RSA keys.

Just to make sure that the passwords were not being transmitted in clear text, I opened up Ethereal and started a packet capture. Indeed the passwords are being encrypted when they are sent.