A hardware keylogger could be something like a small little object that would plug into the end of you keyboard cable, and then in turn plug into a computer. It sits on the line a passively captures all the keystrokes. To get the info out of it you generally need special software of some kind of magic key combo. But they are supposed to work pretty good. Here's a pic of one to give yo an idea:
And yes, given enough time and resources, brute force WILL break that pass.