For password storage I really like Lastpass to replace the old shared Keypass DB. In Lastpass your vault exists online. To speed up the process of logging in, Lastpass comes as plugins for various browsers, OS specific installs, and even mobile apps. If you have access to the internet, you can get your passwords. Its fast, easy, and accessible everywhere. I recommend it to anybody who uses more than 1 computer for multiple sites.
For a password algorithm, I use a very simple one: Just repeat a short password multiple times. You can make a simple 8 character password 32 characters long. And when you add entropy between the passwords (eg password1password12password123) it becomes even longer and more secure since now people have to figure out your repeated password + entropy.
However you do have to consider what the website/program is using for password storage. If there using a pretty weak algorithm (Eg MD5), then longer is better. If they are using a pretty strong one (Eg Truecrypt in AES-Twofish mode with Whirlpool), then you can get away with short ones.
How? Think about it, even if you limit it the possible keys to 62 (a-z, A-Z, 0-9) and know the password is 9 characters long, your still talking about 9^62, or 145,557,834,293,068,928,043,467,566,190,278,008,218,249,525,830,565,939,618,481 possible combinations. Even if you could do a billion passwords a second (which you can't), your talking about 145,557,834,293,068,928,043,467,566,190,278,008,218,249,525,830,565 seconds, or 4,615,608,647,040,491,122,636,592,027,850,012,944,515,776 years. Our sun will explode before you can guess all the combinations. I think I'm safe
What do I use? Well, thats for you to figure out. See you in a few billion billion billion years when you guess it