OS X is a multi-user platform, where each user account has its own settings and documents separate from those of other accounts, allowing for both customization differences but also for security and privacy. Not only do password requirements prevent other computer users from accessing one another's account data, but it can help deter unauthorized users from accessing the system.
While keeping the system secured with a log-in password is highly recommended for most cases, sometimes this password requirement can be a burden. For example, if you have a Mac set up as a kiosk presentation system or as a media center with suites like XBMC, then you may wish to have the system boot and load its software environment directly.
In these cases, limited access to the system may result in automatic restarts after power outages or software updates causing the system to get stuck at the log-in screen.
Often systems that are dedicated for these purposes do not have any sensitive information on them and are usually tucked away in a closet or lock box somewhere without a keyboard attachment.
For these instances, you can set up the system to automatically log on by going to the Users & Groups system preferences and clicking the Log-in Options section under the list of user names. Here, you can select a username from the Automatic Log-in drop-down menu, then supply that account's password when prompted, and the system will then log into that account when it has finished booting. To maintain security, consider enabling only a managed user account or even the guest account for this purpose.
In addition to enabling automatic log-in, for systems that are set up for presentations and media center services, you may wish to have these functions automatically start, too. There are several approaches for doing this, but the easiest is to add the program to the account's log-in items by selecting the account in the Users & Groups system preferences and then adding the program to the list in the Log-in Items tab (note that this will not be possible for guest accounts).
Lastly, be sure that you check the box in the Energy Saver system preferences to have the system automatically restart after a power failure, so in the event of a power disruption the system will reboot and be up and running.
While automatic log-in allows the system to load a user account immediately, remember that it doesn't circumvent all uses of the account's password. With this enabled, physical access to the machine will give anyone entry to its contents, but passwords will still be required to log in to the system through network services like file-sharing and remote log-in through SSH and other Terminal services.
If at any time you wish to disable automatic log-in, you can do so in the Users & Groups system preferences, but if the system is tucked away in a closet or kiosk, then you can also access it remotely to disable automatic log-in from the command line.