This will be a multipart series on Drupal security.
The first rule of security on a Drupal site, or any site for that matter, is: "never trust user input." User input can be used to gain access to your database (SQL injection), steal other user's session cookies and impersonate them (Cross-Site Scripting or XSS), inject unwanted spam into your pages, or to execute code (gasp shudder) on your server.