I see the OnlyKey has software that runs on the computer, is that optional? How would you choose which password you want to have it type in without any software?

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It is required to set the device up, but not to use it. They have 6 buttons and unlock by typing in a pin on the device. The password pairs get selected by short or long press on each button for a total of 12 possible user/pass pairs on device. It acts like a keyboard to most applications.

You need the application to configure your passwords initially or change them. Once they are configured, you can use it with only the key. That way you can use it for OS login and use it on devices you can't install software on by setting up the account information on a different computer first.