Yikes. Take a look at this gem from Microsoft's knowledge-base: "This doesn't mean that your password has been shortened. Actually, Windows Live ID passwords were always limited to 16 characters—any additional password characters were ignored by the sign-in process."

Translation: "Even though you typed in a 40-character password when you first signed up, we ignored most of it and only used the first 16 characters."

Source: http://windows.microsoft.com/en-US/windows-live/microsoft-ac...