This is documentation for Mathematica 6, which was
based on an earlier version of the Wolfram Language.
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DatabaseLink Tutorial

Security and Authentication

Many SQL databases can be configured to require a username and password when a connection is made. This is useful for preventing unwanted access and restricting the range of operations that certain users can execute. This attention to security is important since databases are typically server based.
There are a number of issues for DatabaseLink that need to be considered when working with passwords. These depend on the level of security you want and how this should be balanced with convenience. Another issue is whether you are running Mathematica in a stand-alone mode or inside a server (as in webMathematica).
The most convenient way to work with a password is to place it in a connection configuration file, as described in Database Resources: Connection Configuration. However, the password will be stored in plain text, and an intruder could inspect the configuration file and learn the password. Since this is a security risk, the New Connection Wizard, described in The Database Explorer: New Connection Wizard, does not save a password. However, you can edit the configuration file and add a password. You could provide further protection by ensuring that the permission on the configuration file is restricted to those who are intended to run Mathematica.
A higher level of security is obtained if you use a GUI to enter the password, which has the advantage that the password is never stored. The GUI for the password is opened whenever you use a password setting of "$Prompt".
Click for copyable input
Here is the dialog box for the password.
You could also enter the password in the OpenSQLConnection command, and then make sure that you deleted your Mathematica input as soon as you made the connection.
Using a GUI is useful for an interactive session of Mathematica, but is not very useful if you run Mathematica inside a web server (as in webMathematica). In this case, you have a number of options. You could place the password in a configuration file and use file permissions to restrict access to those who are running the Mathematica process in the web server. An alternative would be to store the password in an authenticated mechanism provided by the web server. For example, the Tomcat server provides a mechanism based on JDBC Realms. The database password could be retrieved from the web server and passed to Mathematica, which could use it in an OpenSQLConnection command. Any hostile inspection of the Mathematica code would not find the database password without breaking the web server authentication mechanism.
For greater security, use SSL to protect the transactions between Mathematica and the database. This is described in "Secure Socket Layer (SSL)".