Once you create a Designer password, a Password Dialog will be presented each and every time the database is launched. Perhaps you have a scenario where, besides the Designer password and the Administrator password, everyone else is lumped into a general-user access group.
Setting up a Default User is handy because it restricts the access privileges of all users to those privileges defined with the Default User. This can greatly simplify database access while ensuring privilege control throughout the entire database at all times.
Should you define a Default User and not associate a password with the Default User, the database will open straightaway without presenting a Password Dialog. Everyone will be automatically logged in as the Default User. Only the Designer or the Administrator need be bothered with the Password Dialog at all.
Even though a Default User has been created, the Designer or Administrator can force the standard Password Dialog to appear simply by holding the Shift-key down while the database is launching.
This is also something to keep in mind should you inherit a database designed by someone other than yourself. Even though a database opens without presenting a Password Dialog, it doesn't mean a password system isn't in place!
For detailed instruction on how to set up a Default User please read the section entitled "Defining a Default User" in the 4D Design Reference manual.