Thanks for the response Marco although you didnt really answer my question ;) - frankly I am an “average user” thus have no interest in exploring the in-depth nature of cryptography on various forums - most of your users will be like me! I am however interested in using Clipperz and would expect you to have a view on my question rather than tell me to go elswhere since YOU are asking for my passwords.

Asking around, I believe this like really anything can be cracked - probably at present through brute force and wouldnt be worth the effort if someone did manage to get a hold of your severs. This to me seems an acceptable level of risk and is not something you should be afraid of explaining to your users!

All the best Sam