I clicked the requisite 3-4 spots on the image, and remembered them, but when I tried to login it wouldn’t accept it.

A password that uses images instead of numbers could give some people access to secure information on personal electronic devices or at ATMs within the next year.

The image authentication system uses a pair of digital images instead of a string of numbers to make logging in simple for the legitimate user, but difficult for impersonators.

“It is expected that many of the conventional user authentication systems would be able to be replaced with our scheme, since recognition of images is significantly easier for human beings than precise recall of passwords,” said team leader Masakatsu Nishigaki, a professor of informatics at Shizuoka University in Japan, where the system is being developed.

Source: Discovery Channel

There is a simple implementation of it I saw called Passclicks over at mininova

http://labs.mininova.org/passclicks/

Passclicks is a new way to login to websites without users having to remember thir old style textual password. Studies have revealed that humans are way better in remembering visual things than textual things. With passclicks your normal textual passwords are replaced with a sequence of clicks on an image.

It is true most people remember things a lot better visually.

I think the Japanese 4 ‘digit’ icon type password might be pretty good though, as a different form of pin number.