Security:ClearTextPasswords
This is a draft, resources which show that clear text pwd are a NO-GO no matter what the "specification sheet" tells you ;-)
CISSP
Well, it's one of the CISSP questions, but let's have a closer look: 
- What is the BEST method of storing passwords for a system:
- password-protected file
- file restricted to one individual
- one-way encrypted file
- two-way encrypted file
 
Well, you may have guessed it already an one-way encrypted file is the correct answer. Of course there are other options so an encrypted password works out well, too. So if you're service provider keeps telling you that clear text password don't matter at all, that's a killer argument ;-)
Books
Computer Security Basics 
 Rick Lehtinen, Deborah Russel & G.T. Gangemi Sr. ; ISBN-13: 978-0596006693 
 Page 65-66