This is done by typing the first character of the password into the browser then clicking elsewhere within the browser and typing a series of random keys. You then click back in the password field and repeat for the second character of the password and continue doing this for each character of the password.
It is vitally important that you do not click on another application to type the random keys because most keyloggers keep separate logs for each application used. This is not completely foolproof since some keyloggers take a screenshot with each keypress event but these are less common and more easily discovered.
Another means of avoiding keyloggers is to use secure on-screen keyboards (the Microsoft Accessibility Tools On Screen Keyboard is not secure) but this also is vulnerable to screenshot keyloggers.
How to Login from an Internet Café Without Worrying About Keyloggers – Carnegie Mellon University
Keep your passwords safe at public computers – lifehacker blog