1. You can't see the passwords in Safari, only the username. The passwords are stored in Keychain access (in your Utilities folder) and to see that password you need to type the password from your session. They are encrypted but it's not the perfect security !
2. We don't know all the features available in Mountain Lion yet.
I use 1Password and it's really easy and good. You can try it free for 30 days.
And in less than 30 days there's the WWDC so we will know more about Mountain Lion.
Keep an eye on these pages :
Don't worry about it... you didn't know
You may want to read the results of an ASC forum search for 1Password before purchasing the product > https://discussions.apple.com/search.jspa?peopleEnabled=true&userID=&containerTy pe=&container=&spotlight=true&q=1Password
Much better to use the native Keychain Access password manager then a third party unsupported Apple product.