Robert Hensing, a senior member of Microsoft's PSS Security Response Team, writes this enlightening post why passwords are so 5 minutes ago.
For you non-techies, the short answer is that you should be using pass phrases instead. For example, you might use a pass-phrase such as "my computer is secure!" or "just a cheeseburger in paradise". The basic premise is that short passwords are easily hacked even when using non-standard symbols such as "p@$$w0rd". Hacking tools are now sophisticated enough to deal with these type of passwords.