http://github.com/codebutler/firesheep
It doesn't currently do anything with passwords, it's only pulling out cookies from HTTP Response headers. But it would be trivial to also get passwords in non-HTTPS requests for logins with the same method.
People should also be aware of the security implications of installing various software on their system. :)
It's very possible, given that the extension seemingly captures HTTP requests/responses. If passwords are sent or received in plaintext, then they can be captured.
Maybe someone who has developed a FF extension can lay my worries to rest -- could this have, say, a built in key logger which sends that data to the author?
I downloaded the source code from github and glanced through it, enough to comfort me somewhat, but I wasn't super thorough.
All that said, EricButler seems to be an HN member in good standing, and someone like that wouldn't do anything malicious, right? :-)