Depending on what the passwords are for, Buenchico's idea can be good or bad.
It's fine if the passwords are low security, to this website for example. It's very, very bad if it's for your bank's website, or something similar that stores your credit card and other details.
My suggestion: use KeePass:
http://keepass.info/download.html
(1.09 windows installer from that page)
It's a free and open source application that stores your passwords in a single file that is highly encrypted. As good as or better than your bank probably uses.
You can add as many passwords as you like, and it even has a generator for you, so that you can use totally random passwords for all websites, if you so wish (also recommended).
You can then press a simple keyboard shortcut, and it'll load that site and log you in with your stored details automatically. So it's simple to use, too.
Then, all you need to do is remember one password/pass phrase. (Using a random sentance that means nothing special is better than a password.)
Because it's saved to a single file, you can then copy this file to a CD or back it up to an external hard drive, or even just email it to yourself every so often. It's highly encrypted, so there's no worry if you lose it, and having a backup means that you shouldn't get into any trouble if your hard drive fails.