What’s the Password Reset Disk in Windows XP?

To protect user accounts in the event that the user forgets the password, every local user should make a password reset disk and keep it in a safe place. Then, if the user forgets his or her password, the password can be reset using the password reset disk and the user is able to access the local user account again.

The Forgotten Password Wizard lets you create a password reset disk that you can use to recover your user account and personalized computer settings if you forget your password.