Next time someone comes to your blog, this is what they will see.
I tried putting the wrong password in, as if I was a nosy visitor who was trying to guess it, but I was only allowed to read the post when I put the correct password in the box.
I tested this in Firefox 2.0 and Internet Explorer 6 and it worked ok in both browsers.
Updates: Password protection does seem to stop anyone from reading your protected post in an RSS feed reader. Have checked this in Google Reader and Bloglines. All you see for the protected entry is the line “There is no excerpt because this is a protected post”.