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Amr:
The answer is somewhat complicated and boils down to "it is probably encrypted 
on disk".

Empathy passwords are stored in the GNOME keyring, which by default is
encrypted on disk using your login password. It is possible to override
this and use unsafe storage with your GNOME keyring in which case it
will be stored on disk in something that amounts to plain text.

Once a keyring is unlocked all passwords can be viewed in their original
unencrypted form. Typically, when you log in your keyring unlocked.

-- 
Passwords should not be required when creating accounts
https://bugs.launchpad.net/bugs/118800
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