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I made a little demo that shows what John described (using OTPs in password
backed cards):
http://www.otpcarddemo.com

You can get a managed “OTPCard” there. Every time you want to use the card
(or preview its claim values), you have to go back to the above site and
request an OTP.
I tested it with Cardspace, Azigo and the Higgins iPhone Selector. Not
really sure what the demo proves, but I thought it would be an interesting
exercise to try and implement this with existing technology.