If you're interested, behind the scenes, Reveal quickly enumerates through all the windows in the system, looking for any windows that have the Edit Box 'Password' style set. Upon finding one of those windows, it just sends a standard Windows message to tell the text box to remove the password character.
What I find most interesting about this, is how few applications protect you from this type of application. A few applications will put the text boxes in frames, which can foil the other drag-and-point type of password revealers. However, I think more programmers should take their cue from Windows NT, and not even store the password in the text box. Many of the Windows NT applications will not work with this application because they store a dummy value (generally all spaces) in the text box instead of the actual password when they need to.