In this dialog you may enter a password, which will apply to the archive, which you are going to create now. The entered password will be active during only one current archiving operation. If you need a global password instead, you may enter it using "Set default password" command in File menu.
If "Show password" option is disabled, you will be asked to type the password twice to ensure correctness.
If you set "Encrypt file names" option, WinRAR will encrypt not only file data, but all other sensitive archive areas like file names, sizes, attributes, comments and other blocks, so it provides a higher security level. Without a password it is impossible to view even the list of files in archive encrypted with this option. This option is available only when compressing data to RAR archive, it is not supported for ZIP format.
If you already saved some passwords, you can access them either using the drop down list associated with "Enter password" field or utilizing the autocomplete feature. Press "Organize passwords..." button to open "Organize passwords" dialog, where you can save frequently used passwords.