The OS X 10.7.4 update fixes a major security issue discovered with OS X 10.7.3’s legacy FileVault, where the user’s password is written in plain text the secure.log and ASL logs. This only affects Snow Leopard users who had FileVault enabled before upgrading to Lion, and didn’t enable FileVault 2, and was a huge oversight on Apple’s part (it looks like they accidentally left a debugger turned on).

OS X 10.7.4 fixes this problem, but does not clear out any logs already contain passwords. To be completely safe, Apple recommends changing your password after updating to OS X 10.7.4 if you were using legacy FileVault, then manually delete log files securely and erase the free space on the drive. See this Apple Knowledgebase Article for more details: