MaintenanceIt might be appropriate to split this entry into an inbound variant and an outbound variant. These variants are likely to have different consequences, detectability, etc., although such differences are not suitable for a split. More importantly, from a vulnerability theory perspective, they might be characterized as different behaviors. The difference is in where the hard-coded password is stored - on the component performing the authentication, or the component that is connecting to the external component that requires authentication. However, as with many weaknesses, the "vulnerability topology" should not be regarded as important enough for splits. For example, separate weaknesses do not exist for client-to-server buffer overflows versus server-to-client buffer overflows.
Other
In the Inbound variant, a default administration account may be created, and a simple password is hard-coded into the product and associated with that account. This hard-coded password is the same for each installation of the product, and it usually cannot be changed or disabled by system administrators without manually modifying the program, or otherwise patching the product. If the password is ever discovered or published (a common occurrence on the Internet), then anybody with knowledge of this password can access the product. Finally, since all installations of the product will have the same password, even across different organizations, this enables massive attacks such as worms to take place.
The Outbound variant can apply to front-end systems that authenticate with a back-end service. The back-end service may require a fixed password that can be discovered easily. The programmer may simply hard-code those back-end credentials into the front-end product. Any user of that program may be able to extract the password. Client-side systems with hard-coded passwords pose even more of a threat, since the extraction of a password from a binary is usually very simple.