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Trezor is one of the leading implementation of a hardware wallet. Its first generation won't support multisig ... because the Bitcoin network itself doesn't have strong multisig support.
What happens if a Trezor is lost or stolen? Where are the private keys it guards backed up? Is a password required to release funds stored on it?
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If I remember correctly, the Trezor uses deterministic wallets, as specified in BIP 0032. That means that the device will give you a sentence that the wallet can be regenerated from, in case it's lost.
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As Julian has stated correctly the Trezor is a heuristic deterministic (HD) wallet as most modern wallets are these days.That means that it generates a tree of pairs of secret keys/public keys(addresses) when its initialised(to be more accurate it actually does this on the fly) from a 12, 18 or 24 word passphrase. So if you have written down(on the card provided by trezor) this passphrase and have it locked away in a safe deposit box you can recover your entire wallet even if you have lost the trezor. DANGER DANGER WILL ROBINSON...... If you have also used a password(not the pin) you will need this too... else all you will see on your recovered trezor is an empty wallet.. Its a great extra security feature if someone manages to steal your 24 word passphrase but can also be very dangerous. YOU HAVE BEEN WARNED ;)
1I will just add (since this question is from 2013) - as of 2017, Trezor supports multisig, through Copay Chrome app. – Karel Bílek – 2017-07-01T14:38:26.897