PWM is not a password 'cache'...
In the strictest sense this is true, but saying that it is not a cache is really just semantics isn't it? With a master password and your rdf file they have every password you use, so even though it doesn't "store" the passwords it will regenerate them for anyone knowing the master password and having the rdf file.
3) Do not remember or allow windows to track the files in 1) and 2)
Not sure how - or even if - this would be accomplished...
TrueCrypt does it somehow, so it must be possible. This is necessary if you use keyfiles otherwise you can just search the MRU file lists to find the name of the keyfiles and exploit encrypted volumes/files that are using keyfile encryption.
Isn't this the same as this?
It is to a degree, but that thread sounded like nobody could come up with the method of how to encrypt it securely. Using only the master password would be pointless really. I think a combination of the master password and keyfiles would be the best method.
As Eric has pointed out, you can already accomplish much of what you want using TrueCrypt or some other 3rd party utility.
Could you explain how to do this as TrueCrypt requires mounting their encrypted volumes just like a disk drive which means a different path than your default location of the passwordmaker.rdf file.
The issue with TrueCrypt is that you MUST decrypt the entire volume when you mount it and when it's mounted anyone can read data from it (i.e. other users or programs running on the same machine). Granted you can use ACL's to keep others out if they don't have admin privs, but programs running in your account will be able to see anything in that mounted volume.
Having PWM do on-the-fly decryption (i.e. rdf file is never in plain text) will prevent this type of snooping.
As previously mentioned, it DOES, but only if you use the auto-populate functionality.
Perhaps, but browser histories would kill you here. A master password combined with your browser history and auto-everything in PWM would allow a hacker free range to your accounts.
Craig