Just to extend the excellent replies I'll add that computers don't normally store your password and compare what you have entered with that. Instead when you enter your password for the first time they run it through an algorithm that converts it into something completely different. That's what they store.
Every time you log in they take what you have entered and run it through the algorithm and compare the result with what they have stored. Thus no at least half way sensibly written system has a record of your password. This is great because if the system is compromised your password is still unknown.
Password hacking as others have said is the process of finding 'some text' that when run through the same algorithm produces the same value. Once they have this they can log in using 'some text' as the password.