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I have been using it for a while, and it is a real convenience feature. I cannot tell you how many times I was saved by it.

Do you think it is safe?

Does it have access to the unprotected password list? In the same lines, how easy is it for other Firefox addons to access the list of passwords? If it is easy, and there is standard API for it, then in principle other addons can also call home with the passwords, isn't it?

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This website might explain some things for you, but it seems it is using AES-256 encryption so its pretty safe for non Top-Secret work. The real security pit here is your choice of your pin number. Obviously it should be completely random and impossible to just guess (no 1234). Xmark itself cannot decrypt your passwords due to the nature of the algorithm. Addons can access your password list, there are many that actually try to manage it and do some extra features. Just try to only use addons that are popular, have a lot of reviews and are from authors you trust.

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Thanks. I am aware of the mechanisms that Xmarks uses... but would you consider is as trustworthy? –  KalEl Jul 14 '10 at 9:38
    
I would consider Xmarks a trustworthy extension... more than the other password managers out there which there are a ton of. Xmarks is pretty established now, but I still don't use it for password sync just bookmarks :/. Hmmmmmm... it all matters how paranoid you are. I would try to only sync passwords that are not "important" though, such as non bank account, credit card and work sites. –  Javed Ahamed Jul 14 '10 at 10:31

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