I (and many other people) use cookies for automatically loggin into websites.
When I go to this site, I don't have to login, because there is a cookie on my computer from this forum.
But before the forum loads my data, it wants to know if the cookie is correct, so it's gonna check it.
This is the cookie from this forum:
bbuserid: 123456789
(blah...)
bbpassword: mypassword
(blah...)
When I enter the site, the forum looks searches into a database for my userid. When it founds it, it will select the password. Then he compares the two passwords (from the database and from the cookie) with eachother. When they are the same, you are logged in, else the cookie will be deleted.
Why they put the password in the cookie??
Well if the cookie is like this:
bbuserid: 123456789
(blah...)
Then I could easilly make a cookie with a random userid, and log in under every account I want!