"The 'site name' code ensures that all of your passwords are unique. This protects you from having all of your passwords compromised by a security lapse on any individual website."

Totally untrue. If any of the websites has failed to do proper password hashing (or you password is intercepted due to keylogging, bad HTTPS, bad remote host, etc) then the security of all your passwords will be VERY low, depending on the length of the site's name. This is because the beginning of the password is constant, and the latter part is a (partially discovered) substitution.

Still, for "ye olde user" this isn't that bad. Could easily be improved with some sort of substitution-ring-scheme, where you have various substitutions and select the substitution based upon the website's name. Shouldn't be much more expensive, but could be a bit bulkier (or less readable hehe).

Would've been much cooler if they had actually put a display on the thing, and made it hash the constant key, user secret and website name together. But the price would be higher, so Yubikeys and the like enter the picture.