From: DeskNow Knowledge Base
http://www.desknow.com/kb/

Is DeskNow using clear text passwords?
http://www.desknow.com/kb/idx/13/042/article/

No. Since version 2.0 (June 2003), DeskNow encrypts login passwords that are transmitted from the browser to the server with a very high security standard.

The passwords are hashed using the 128bit MD5 algorithm, with once-only 'salt' tokens. It is mathematically impossible to decode a password from its hashed value.

This is more advanced than most commercial web applications on the market (many oh which still use plain text passwords, or very easily decoded ones).

Since version 1.0, in addition, DeskNow has supported 128bit SSL encryption of all communications.

There are also other encoding options for passwords (ex. 3DES). See this article: http://www.desknow.com/kb/idx/5/004/article/

Note: these comments are valid for the normal login to DeskNow. Authentication via other channels like WebDAV/Webfolders, SMTP, POP3, DirectFiles (which uses the HTTP protocol authentication) is performed according to the respective protocol, which can be weak. This is a shortcoming of the protocols. We recommend using SSL over all these protocols where strong security is required.