Operating System Passwords
OS passwords are not an end-game security precaution. We can reset a Mac OS or Windows password in about sixty seconds, as can anyone who has any technical experience with either. Operating system passwords prevent coworkers, children or other people from accessing your data.
Important: You really shouldn’t name them after your dogs/cats/children, and be aware that the ability to boot to a CD/DVD in Windows or Single User Mode on a Mac gives anyone the ability to reset your password. You can disable Single User Mode on Macs (which isn’t advisable unless you have really sensitive data).
Firmware Passwords
In the PC world, these are called BIOS passwords. On Mac OS X 10.7 and later, you can enter the Recovery partition (Option boot) and set a firmware password. It can prevent other users from entering Single User Mode, which can be used to change a user’s password or to boot from an external or DVD drive to access local files.
There is risk, however, because if you forget this password, you may not get your data back if it is not backed up. Newer Macs (since about late 2011) have built-in security that requires us to contact Apple to reset them.