I am a big believer in teaching people to use better and stronger passwords, and to be more security-aware in a world where everything is potentially up for grabs. It's not a matter of "if", but "when" you're going to get tagged somehow - so the best you can do is to reduce frequency of it by being smart about online security. And one of the best ways to do that is to use a strong password. 

Enter Naked Password. The stronger your password is, the more clothing "Sally" will remove: 

Npword
It's certainly a novel way to approach security, but as Sophos pointed out, the implementation leaves a lot to be desired: Password123 was enough to get her completely stripped down to the bare 8-bit pixels. Personally, I can see someone creating a far more graphic version that's actually a social-engineering trick into gathering passwords. 

Nevertheless, some sort of reward-based system for password security is a good idea, even if it's the equivalent of a farmville gift.