[absentbird]

This is how I come up with passwords; I find a phrase that I can remember without too much trouble then I use the first letter of each word to make a password.

Phrase: Three Rings for the Elven-kings under the sky, Seven for the Dwarf-lords in their halls of stone

Password: 3RftE-kuts,7ftD-lithos

Easy to remember and highly secure. I have been using this method for years.

Bonus example: Four score and seven years ago our fathers brought forth on this continent, a new nation, conceived in Liberty

4sasyaofbfotc,ann,ciL

Less secure then the last example but still strong. Especially if you use uncommon strings like the words to a song by a local band or a phrase from the newspaper or an unpopular book. That way even an attack targeting this method will take a long long time.

[kragen]

This is probably not as secure as the xkcd scheme if you don't make up the phrase yourself. See my comment above with calculations about a variant of this scheme. I suspect that both of your example phrases are among the million most quoted phrases in the English language, giving them entropy of under 20 bits.

[rubberbandage]

This is the same method Apple officially recommended in their help for choosing a secure password—the example they gave was “Tnf,tfws95” (“That’s not flying, that’s falling with style”) followed by the year of Toy Story’s release (where the quote is from). I agree that it’s an excellent combo of passphrase and obfuscation. Unfortunately, their documentation now[1] gives the same kind of example that XKCD points out will be exceedingly difficult to remember correctly.

[1] http://support.apple.com/kb/HT1506