Privacy
The Twitter API requires users to authenticate with their username and password before doing things like adding new friends. As a result, Twitterator needs your username and password to do its job. No way around it folks.
Your password isn't stored anywhere in the Twitterator system. It's used to authenticate you and then thrown away. You should also be aware that your password is sent to Twitter in plain text. No SSL here. Of course, I don't think Twitter uses SSL either, so this script isn't really any less secure than Twitter itself.
