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tptacek explained to me once how using a self-signed certificate (or more to the point, trusting it) is a bad idea: http://news.ycombinator.com/item?id=2376644

You can get free certificates backed by a CA trusted by most browsers, for example at https://www.startssl.com. There are some limitations (e.g. no wildcard certificates) but it's still much better than a self-signed one.

Though using self-signed certs during development is a perfect way to test https without shelling out for a CA signature.

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