How secure is checking the automatic authentication option in Skype client? What if I sign in with Microsoft account instead of Skype id? What if both accounts are merged? Is there any documentation on how it works in recent versions? For example, whether it stores a plain text password, or how easily it can be retrieved. More likely unofficial information, from people interested in the subject (for example, you would get surprised how secure Windows Credential Manager actually is). But it would be good if Microsoft documented how it works somewhere, so we can feel confident that our main account is safe.
My concern is that the Microsoft password is just too important, giving access to all Microsoft services, while Skype account is more specific. I do not want my main password having any chance to get compromised just because I do not want to keep typing a password all the time in Skype. Unfortunately, Microsoft have not copied Google's application-specific passwords yet. That allows creating secondary passwords for Google account, protecting your main password from getting stored anywhere.
Not stored securely, but stored at all
Please note, I am not worried about whether the main password is stored insecurely, but stored at all. Whatever encryption is used, you can simply copy whole Skype profile without decrypting anything, and possibly with some additional hacking, you could at least impersonate the user on Skype (assuming that a compromised stored password will generally mean a compromised computer, at that point it should not be that hard).
Even so, it could be possible that some security flaw was explored by the attacker in order to elevate the privileges from the Skype account and get access to the main Microsoft account. I assume their security is good regarding this, but it becomes much more threatening if the main account password or some sort of authentication token is stored, in any form (again, you can simply reuse the encrypted data in another profile or in your desired hack).
