Not too long ago I had a similar experience when applying for a job online (ironically for an entry-level IT position). I was required to setup an account with a password and an associated e-mail address. While filling out the application, I paused the process to get some information I didn't have on hand and received an e-mail from the company that said I could continue the process by logging on with my account name and password, both shown in cleartext in the message.
In my brother's case, it was an auto-generated password but still problematic. In my case, it showed that the company was storing my account information in cleartext to be able to e-mail it back to me. Needless to say, I e-mailed the head of their IT department explaining why this was unacceptable.
My questions are: How frequently have people run into companies sending sensitive information (like passwords) in cleartext via e-mail? and What would you do if this type of situation happened to you?