At IBM someone made something called fetchnotes that worked like fetchmail, but worked with mail and calendar, made me able to get away with minimal usage of notes.

I think it was to provide an indication that the password was correct at a glance. (IIRC the number of dots in the password field was also generated, so it didn't necessarily match the number of chars)

The image was essentially a simple checksum. Each user would eventually memorise which icon was "theirs".