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As far as encryption goes.. there will always be one big downside... no matter how much you scramble, hash, hide, maniuplate, map, ,mask, rotate, xor, bit shift etc.. there will always be a way to decrypt all the work you've done to hide your password. (yes, some schemes are wicked harder than others, but even the most technical encryption scheme has to be decrypted)
Just letting you know...Your right. The only problem is with algoriths like DES, Triple-DES, GOST and other highly advanced algorithms would take a very long time to decrypt. Even though these schemes are even based around the XOR function they add unpredictable elements to the mix. The only way to decrypt these would be through a brute force attack...