If you look at the actual WP create account page here: http://en.wordpress.com/signup/ http://en.wordpress.com/signup/ You'll see that there is a box for your

If you look at the actual WP create account page here: http://en.wordpress.com/signup/ http://en.wordpress.com/signup/ You'll see that there is a box for your password and a confirmation of the password, so that leads me to believe that they are actually sending the user the password they created the account with, rather than a randomly generated one. Otherwise, why have the input fields there at all? Therefore, they must be storing either plain text or two-way encryption.