There's been quite a lot of chat in the blogosphere about password marking
(generically) since Jakob Nielsen published an alertbox against it:
http://www.useit.com/alertbox/passwords.html

and then Bruce Schneier, who gave him some security advice, somewhat
recanted:
http://www.schneier.com/blog/archives/2009/06/the_problem_wit_2.html

I'm not yet seeing convincing evidence from user research that inclines me
to one view or the other.

Jakob's piece talks about mobile, in particular, and there are certainly
major issues in trying to put an accurate password into a mobile device. To
give just a few factors: inadequate keyboards, small screens, awkward
contexts, possibility of being overlooked.

What I'm not yet seeing is much consideration of what I call 'relationship'
issues. In this area, those would include the reason why the user is
creating/entering the password, the relative importance of this security
compared to the value of what lies behind it, and so on.

So coming back to your question: what sort of account is being created? Are
users likely to be feeling especially sensitive for any reason about the
personal information or whatever they will divulge to the account? Or
especially casual? Are they likely to be shoulder-surfed? Or using a mobile?
What do they expect to happen on a site of this nature?

Broadly, the plain text echoing is likely to be reassuring for a mid-to-low
importance site that is used in (mostly) private circumstances. 

If it's a high-security site or is likely to be used in public
circumstances, then keep as much private (i.e. masked) as you can.

And try to get some users' views on the matter, preferably by getting them
to try a prototype.

Best

Caroline Jarrett
"Forms that work: Designing web forms for usability" www.formsthatwork.com

Effortmark Ltd
Usability - Forms - Content

Phone: 01525 370 379
Mobile: 0799 057 0647
International: +44 152 537 0379

16 Heath Road
Leighton Buzzard
Bedfordshire
LU7 3AB
UK

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