when you wrote 'linux 1' at the LILO prompt, you went into single user mode. In this mode, you are root and you are not prompted for a password, so this is why you can change passwords and add new users without even knowing the real root password. IIRC, it's possible to block single user mode by putting a password, but I'm not too sure of that (I'll check it out though).
And yes, in a sense that box is insecure, but to internal, physical attacks.


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Haven't used it in weeks and can't remember the password. ;D

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