I was wondering if someone could please shed some light on how Windows 8 stores password or if it does at all? I believe that Windows 8 has more cloud features and that it goes by your Windows Live ID, so does that mean it uses the password for your Live ID for when you login?
closed as not a real question by HackToHell, Synetech, Moab, 8088, ChrisF Nov 13 '12 at 12:08
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Windows 8 stores your password the same way Windows 7 does or recent versions did.
If you use a local account, nothing changed at all.
If you use Microsoft account, it works similar to a domain account. Your password to Live ID account is cached so that you can login Windows even if there's no Internet connection. Windows will synchronize the passwords when you're online.
Of course, your password to Microsoft account is used by Windows to authenticate on SkyDrive to synchronize your settings and, possibly, files. Thus it works seamless, and you're not required to enter your password yourself.