I've personally found that U3 is an incredibly inconvenient piece of software, especially in the work/school environment where the computers want permission to run such a program. (Lucky me, I know the Administration password for the school computers... I made note of the new one they are going to use this year as well...)
Also, the "password" software is just the worst of it... since if you go on a computer without the right permissions, you cant access your data.
Not to mention, it does make the "loading" of the drive slower, requiring more advanced device loading, etc.