Password.ly helps you use a different password for each website. You only need to remember one.
We use a repeatable one-way algorithm 'bcrypt' to convert your master and site name into a new password. It is not possible to obtain your master password given result passwords.
The way we generate passwords means we don't have to store anything on our side (unless you want us to). The passwords we generate are the same whether you use our website, offline application or any mobile apps.