According to this FAQ, Twitter is getting ready to support OAuth sometime next month. This is great news; up until now, every service using Twitter’s API needed your login name and password. That meant problems when changing passwords, and extra ways for your password to be exposed to hackers.
With the new OAuth authentication, external applications only need to be approved by the person using it; Twitter will generate an authentication token that can be used instead of your login and password. Since each application also gets a unique application key / authentication token, users get complete control of the rights granted to external applications (currently read-only or read-write, but that might be expanded in the future).
For more information on OAuth see the official OAuth site.