Why password reuse is a bad plan

Here is an announcement from Adobe about a leak of ~200 email addresses and passwords, containing .gov and .mil addresses.

http://arstechnica.com/security/2012/11/adobe-breach-reportedly-spills-easy-to-crack-password-hashes/

It looks like the passwords are hashed with md5, I can’t seem to find anything if they are salted or not. I don’t think it will matter much with md5 as the hashing algorithm.