Topic: Storing Authentication data on client - How?

I have my app set up with basic authentication.
I am building a browser toolbar which will have to get records from my application and display them after authentication.
So I implemented Http Auth (thanks ryan!) and that works and my app spits out xml in this case.
Now I have both forms-based authentication and Http Auth.

1)How should my controller perform the appropriate auth depending
on where the request is coming from?
    Should I have two controllers one for basic_auth and
one for http_auth or is there a check I can make?


What is the best way to store the authenication information
on the client (cookie??)
so that the toolbar doesn't have to keep asking the user to log in.
Just like how del.icio.us toolbar works.

This is what I like to see:

User registers at the site.
[Some authentication information ?] is stored on the client rightaway.
User Downloads the toolbar.
The toolbar keeps talking to the app using the stored auth info.

2) Can someone advice on WHAT authentication data should be
stored on the client and

HOW is that accomplished on the rails side?

Thank you very much for any help.