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I decided to opt for Google's 2-step authentication for increased security.

After setting up my Android device with the Google Authenticator and also configuring backup phones and printing out the list of backup verification codes (and putting that in a safe place ;-) ), I was presented with a screen, asking me to generate (optionally) application specific passwords.

Which apps should these application specific passwords be used in?

I'm guessing the Talk desktop client and any email client that uses the Google credentials are what these will be used for.

Do I need to create multiple passwords for every app or will a common one work across all?

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up vote 3 down vote accepted

At present, it's pretty much anything that accesses your Google account and doesn't go through the web interface -- chat clients, email clients, etc. You'll need a different password for each one -- they're one-time passwords.

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Are you certain these are one-time pwds? If they were, wouldn't I have to generate new ones each time my email client decides to login to the IMAP server to check for email? –  Sparx Feb 19 '11 at 5:53
    
The following blog post from the Google security team states that they are one-time: googleonlinesecurity.blogspot.com/2011/02/… –  Mike Scott Feb 19 '11 at 9:33
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