What's the best way to/How do you manage your passwords?

Most of us know that we should not use the same password for multiple sites, that our passwords should contain numbers and symbols as well as letters, and that we should change our passwords frequently. Doing this practically in the real world is pretty difficult, what with twitter, facebook, fluther, im, work email, online billing, personal email, etc. accounts. I’ve read various tips for making this easier and still secure, but most don’t seem helpful. I’ve seen web services that will manage your passwords for you, but I still don’t trust this approach, and they are usually not free. I’ve also seen a hardware solution that you key a password into and it auto-generates passwords for all your sites and stores them for you. This seems the best in terms of security, but requires you to have the device with you to log on, and is also expensive. What do you do to manage your passwords? Do you follow the rules and somehow keep track? Use only one password? Just keep using the “forgot your password?” link? Is there a better way? Maybe some new technology that doesn’t exist yet? How about an implanted RFID chip?