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There's a difference between being security-minded and being a crypto-nut. If you're proud of the work you're doing and it's not secretive, why bother encrypting the hard-drive? Similarly, he wouldn't have been caught in the first place if he had been security-nutty about the process, but he didn't think he was doing anything immoral.

Isn't that safer than typing it every time? A key logger could get it then. Has anyone ever extracted a password stored in a client like that?

I don't know anything about Skype but yes, people have definitely extracted passwords saved in IM clients like that.

There's no way he would have set things up to go from boot to skype without at least one password.

There's the possibility that the person knew the password to log into his computer and Skype was a startup program.