The VNC application stores its passwords encrypted within the registry but uses DES for encryption. As DES is broken, the original passwords can be recovered.
The storage of passwords in a recoverable format makes them subject to password reuse attacks by malicious users. In fact, it should be noted that recoverable encrypted passwords provide no significant benefit over plaintext passwords since they are subject not only to reuse by malicious attackers but also by malicious insiders. If a system administrator can recover a password directly, or use a brute force search on the available information, the administrator can use the password on other accounts.