Good and bad password practices

I just stumbled across an article in the Danish newspaper Politiken, which give some recommendations about how to create strong passwords, which is all fine. However it also recommends that you test your password with passwordmeter.com (I actually expected something like this before clicking on the article).

At least one good password practice is to not disclose your password to third parties and especially a site like passwordmeter.com which you know nothing about (wouldn't it just be a genious way to collect passwords and origin IP adresses?).

So first thing is to make a whois lookup on the domain:

Registrant:
Domains by Proxy, Inc.
DomainsByProxy.com
15111 N. Hayden Rd., Ste 160, PMB 353
Scottsdale, Arizona 85260
United States

I didn't know who Domains by Proxy, Inc are, but just the name certainly make some bells toll. It's definately not a site I want to use to test passwords!

Reports on the web range from describing it as a normal service to a hideout for spammers. Why on earth would any legitimate business want to hide their identity and especially if you want users to type in all of their passwords?

Update: As some of the comments pointed out it actually does everything client side (at least with Konqueror and Firefox), however for the average user it's still bad practice to type in their password on any third party site.