In preparation for a talk I'm giving at DOSUG I'm going to post my thoughts as they develop. At this point, I'm filling in gaps, so things might jump around a bit.
Passwords present a bit of a problem for the system. Storing them in a file makes them insecure, but the system needs them to encrypt and decrypt files. The solution that Miranda uses is if it lacks a password, to ask the user for it as part of its startup routine.
This does require a human being to start the system, but it will hopefully be infrequent enough that it will not be too much of a pain.