Ok, in my opinion you have two options:
1. You let him be (which I don't think is a good idea, since he seems to be at an unhealthy point right now.)
2. You TELL him that you want to know what's going on. Talk to him... I mean, come on! You're the parent here, so YOU should be the one who's not afraid to bring up an awkward topic. If you think he's doing x y and z, ask him if he is. If he says no, then ask him what he IS doing. Again, you are a parent so YOU can take away the laptop.
Instead of secretly implimenting a spying software, why don't you TELL him that you're going to? I would be absolutely outraged if someone tried to spy on me without telling me (Not that I do anything bad, but privacy is important!) Not to mention, with all that time in front of the PC, hes probably pretty computer savvy and isn't going to be fooled by some bloated keylogging software that you can find in the task manager.
IMO you need to think less technically about this, and more like a parent. It's fine that you don't completely trust him with all of that time on the laptop; it's not okay to betray HIS trust for you though by secretly hacking his system. If you want to monitor what he's doing, you have to tell him. Of course he'll give you attitude about it, but if you want to make sure what he's doing is safe, then that shouldn't matter.
I'm 17 years old and spend a good chunk of time on the computer (but I think I do a good job of balancing out with my actual life) and quite honestly if my parents told me they wanted to put parental controls on my computer, I would be pissed off. But they're my parents and I have respect for them and I would clearly let them do what they say because otherwise they'd take away the computer. However, if I found a keylogger that they put on without telling me, I would probably stop speaking with them.
Privacy is important, but if my parents are the ones paying for the internet and a lot of my computer parts, they have every right to inquire what I'm doing (as long as they TELL me). Sure, all they'll find is hours of AIM chats and answering CF questions like these
but if they want to know, they have the right. And the same should be no different for you.
Oh god now I'm getting all grr about parents these days, but seriously... don't let you're kids control you. It's borderline pathetic. For gods sake, just take away the laptop. He can be pissed off all he wants, but you can be sure he's not using the computer.
Well, I've gone completely off topic now, but bottom line is that I refuse to give you any help with password cracking. And this is not because it is illegal (believe me, I have no problem with that), it's because as a parent you shouldn't have to resort to secretly spying on your kid to feel like you know them. Good luck, either way.