The approach I use is to combine a master password (so only one password to remember) with a site specific name (e.g. the domain name or site title) using some difficult to reverse combining / hashing algorithm.

This way, even if one password is leaked, it should be impossible (or at least very hard) to calculate the master password.

I just uploaded a simple demo of this: http://onewheeledbicycle.com/junk/passwords/index.html