Hmm. I've just been playing with the password on my 2002-based device. I've never used it before so I set one up, turned it off and turned it on again. Sure enough, it didn't ask me for a password and I could happily edit appointments, delete files and so on.
There are only two things that it wouldn't let me do without entering the password - change the password and sync with my PC. Seems a bit useless to me - should your device be stolen you can rest assured that the thief wont be able to sync your appointments with his own. I'm sure we can all sleep a lot easier now.
Nelviticus