The password for accessing the admin portion of the site is held in the globals file. The value that you enter for the password when logging into the admin area is held in a session variable. The variable is then compared against the value in the globals file. This is only for the admin area, any users that register to the site will not have their passwords stored in a session variable.
As far as I understand this would still be fairly secure as someone would need access to the php server in order to exploit this. If someone had access to the site they could just open the globals file to see the values.
After logging into the admin area you should be returned to the index page. This is controlled with the code on the users_Login page in the admin area on line 11. You can update this to be any page you need.