Mac OS X Lion 10.7.4 fixes an issue where a user's password could be exposed in plain text, according to release notes.
An issue existed in the handling of network account logins. The login process recorded sensitive information in the system log, where other users of the system could read it. The sensitive information may persist in saved logs after installation of this update. This issue only affects systems running OS X Lion v10.7.3 with users of Legacy File Vault and/or networked home directories. See http://support.apple.com/kb/TS4272 for more information about how to securely remove any remaining records.
We recommend users update as soon as possible.