XP Major Security Flaw?

From: Josh Dear (barcote2000@yahoo.co.uk)
Date: 01/11/03 

From: "Josh Dear" <barcote2000@yahoo.co.uk>
Date: Sat, 11 Jan 2003 04:35:01 -0800

Does anyone elso know about this. It would appearit is
possible to completely bypass all security on XP by
logging in on safemode, typing something or other,
logging into an administrator account (no password is
asked for under safe mode) and removing the password from
within control panel.

Then you simply restart the PC and login to the admin
account, which no longer has a password, and assign
yourself privileges or simply take over the admin account
by adding you own password to it.

My 15 year old little brother did it right in front of my
eyes - removed administrator password and upgraded his
limited account to administrator? Does MS know about
this???!!